Melrose shareholders set for £2.4bn windfall after EU clears Elster sale

SHAREHOLDERS in Warwickshire turnaround specialist Melrose Industries are in for a happy Christmas after the firm’s £3.3bn deal to sell its Elster business to Honeywell was cleared by European authorities.

The move paves the way for Melrose to return £2.4bn to its shareholders.

In a short statement to the London Stock Market, Melrose said: “The European Commission has granted clearance for the acquisition of Elster by Honeywell International Inc. All other required regulatory approvals have been obtained. The transaction is expected to complete within several days.
 
“Following completion, Melrose intends to return approximately £2.4bn in cash to its shareholders, which is equivalent to 240p per existing ordinary share in Melrose, and to carry out a share capital consolidation to ensure, as far as possible, that the market price of an ordinary share remains approximately the same before and after the proposed return of capital.

It said full details relating to the return of capital, including the amount being returned and an expected timetable of principal events, would be announced in due course following completion of the disposal.

Melrose announced in July that it had concluded a deal to sell the Elster Group business to Honeywell. It was approved by shareholders in August.

Elster is a world leader in measuring and improving the flow of natural gas, electricity and water.

Melrose has implemented a corporate reorganisation in order to facilitate the return of the cash to shareholders.

The process is expected to complete in Q1 next year.