Thyssen AG is expanding its U.S. presence with the friendly acquisition of Giddings & Lewis Inc., one of North America's largest producers of machine tools.
The German steel maker has offered $675 million to take over the Wisconsin firm, which is a major supplier to General Motors and Chrysler Corp.
Thyssen made its offer after being approached by Giddings & Lewis, which was trying to fend off an unfriendly takeover bid by Harnischfeger Industries of Milwaukee.
The board of Giddings & Lewis unanimously accepted Thyssen's offer.
On Friday, June 13, Giddings & Lewis and Thyssen issued a joint statement detailing their agreement. Thyssen will pay $21 per share in cash to buy all of Giddings' stock, topping Harnischfeger's bid of $19 per share.
Giddings' management will remain in place, the company will retain its corporate identity, and its headquarters will remain in Fond du Lac, Wis. No plant closings are expected, said Marvin Isles, Giddings & Lewis CEO.
Harnischfeger appears unlikely to top Thyssen's bid. Chairman Jeffery Grade issued a statement saying he would drop his six-week takeover campaign if Thyssen stood by its offer. The deal is subject to antitrust review.
Last year, automotive customers accounted for nearly half of Giddings & Lewis' sales of $763 million.
The company lost $12.5 million in 1996, but was profitable in the first quarter of 1997.
Thyssen, which is based in Duesseldorf, is Germany's No. 2 steel maker, with $26.2 billion in annual revenues. In 1978, the company established a presence in the United States when it bought Budd Co.
Including Budd, the steelmaker's North American sales totaled $2.7 billion last year.
Thyssen Inc. ranks No. 39 on Automotive News' list of top North American suppliers, while Thyssen Budd Automotive is No. 22 on the list.