Nexans SA has agreed to buy AmerCable Holdings Inc. The company plans to complete the USD 275 million acquisition of AmerCable this month to become the leader in cables used by the oil and gas industry. It intends to finish acquiring 75% of China’s Shandong Yanggu Cables Group’s power-cable business in the third quarter, CEO Frederic Vincent said in an interview. Nexans is also building an extra-high voltage plant in the U.S. and an assembly line for rail-car harnesses in Morocco. “We have to consolidate and integrate all that,” said Vincent, who became CEO of the Paris-based company in 2009. “Management can’t multiply itself indefinitely.” Nexans has said it wants to expand in energy infrastructure in emerging markets, and specialty cables for rolling stock, automation and oil and gas in mature economies as well as in China. The market for cables in the oil and gas industry has the potential to expand by 5% to 10% a year. “The growing shift in North America towards unconventional oil and gas development is set to increase demand for AmerCable’s products and services,” Vincent said in a statement. “AmerCable’s presence in mining and oil and gas will double the size of Nexans’ activities in those segments.” AmerCable had revenue of approximately USD 270 million in 2011, up more than 30% from a year earlier. The cash purchase will boost Nexans’ Ebitda margin and earnings per share from the first year.
