(MENAFN - AFP) Koch Industries, the sprawling US global industrial conglomerate, announced Monday it was buying Molex, a manufacturer of electrical and electronic components, for 7.2 billion.
Owned by the billionaire Koch brothers, David and Charles, known for their ultra-conservative political activism, Koch Industries, one of the largest US private companies, said it would pay 38.50 per share in cash.
That represents a 31 percent premium to Molex Incorporated's common stock closing price Friday.
The acquisition deal has been approved by both companies' boards of directors, Koch Industries and Molex said in a joint statement.
Some members of the Krehbiel family, which controls Molex, and certain Molex executive officers, holding a combined 32 percent of the company's equity, support the transaction, the companies said.
At the close of the transaction, expected by year-end, Molex will become a standalone subsidiary of Koch and will continue to be operated by the company's current management team.
The 75-year-old company also will retain its name and its headquarters in Lisle, Illinois.
"After 75 years this was a difficult decision, but our board of directors and our family believe that this transaction, which follows a diligent and thorough review process by the board, provides outstanding benefits for all our stakeholders," said Fred Krehbiel, co-chairman of the Molex board.
Charles Koch, chairman and chief executive officer of Koch Industries, said the acquisition of "provides a significant new platform for growth."
Molex makes electronic, electrical and fiber optic interconnection systems in 15 countries and employs more than 35,000 people worldwide.
More than 70 percent of Molex's revenues come from products sold outside the United States.
Koch, based in Wichita, Kansas, owns a highly diverse group of companies, ranging from refining and biofuels to fertilizers, commodity trading and ranching.
It has a presence in nearly 60 countries and a global workforce of about 60,000, with annual revenues of about 115 billion.
Investors cheered the news, sending Molex shares up 31.4 percent to 38.56 in midday trade on the Nasdaq.
The announcement of the takeover deal stirred interest from two law firms seeking to determine whether it is in the interest of Molex shareholders.
Bernstein Liebhard LLP said it was opening an investigation "focused on the potential unfairness of the price to Molex shareholders and the process by which the Molex Board of Directors considered and approved the transaction."
Harwood Feffer LLP announced a similar action.
The billionaire industrialist Koch brothers are best-known in the US for backing policy groups such as the libertarian Cato Institute think tank in Washington.
They also were behind the formation of the Americans for Prosperity political action group, which supports many causes backed by the ultra-conservative Tea Party, although they are not formally affiliated.