BICC to sell energy cables business unit
UK engineering group BICC is to sell its energy cables business to General Cable Corp. for £275m ($445m). The sale will make General Cable Corp. of the USA the world`s third largest maker of wire and cables after Alcatel of France and Pirelli of Italy, and reflects BICC`s belief that there is overcapacity in the energy cable market, with no sign of improvement.
The BICC cable unit makes power cables and related equipment. In 1998 it had operating profits of $40m on sales of $1.8bn. General Cable said that it now aims to increase the unit`s profit margins, which have lagged behind those of its competitors.
The deal is subject to BICC shareholder approval at the annual general meeting on 5 May. BICC has been shedding assets recently in order to focus on its core construction activities. In March this year, the company sold its telecommunications cable unit as part of its restructuring plans.