Ceradyne Inc. (NASDAQ: CRDN) shares jumped in premarket trading after 3M Co. (NYSE: MMM) announced that it plans to acquire the Costa Mesa, Calif.-based maker of ceramic products for about $860 million. The $35 per share offer represents a premium of about 43% to Ceradyne’s Friday closing price.
Under the terms of the deal, 3M will initiate a tender offer to buy all outstanding shares of Ceradyne within 10 business days. The board of Ceradyne has unanimously recommended that shareholders accept the offer.
3M said in a statement:
Ceradyne is an excellent complement to our existing businesses in transportation, energy markets and defense. By joining 3M, Ceradyne associates will have the opportunity to use the power of 3M’s global reach, culture of commercializing new products and operational discipline to accelerate this platform in serving our customers with highly valued solutions.
Ceradyne CEO Joel Moskowitz noted:
3M is renowned for its innovation, its R&D and its global reach. This is a great fit and I know that advanced ceramics technologies have a tremendous future within 3M and can contribute to the development of unique solutions for many demanding applications.
Ceradyne will become part of the 3M Energy and Advanced Materials division. The transaction is expected to be completed in the fourth quarter of this year.
Ceradyne shares are up 43% in premarket trading to $34.94. The 52-week range is $19.45 to 36.61. Shares of 3M are inactive in premarket trading.
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