Industryweek 5193 Molexassembly
Industryweek 5193 Molexassembly
Industryweek 5193 Molexassembly
Industryweek 5193 Molexassembly
Industryweek 5193 Molexassembly

Koch Industries Announces Purchase of Molex for $7.2 Billion

Sept. 9, 2013
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.

NEW YORK - Koch Industries, the sprawling U.S. 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% premium to Molex Inc.'s (IW 500/252) 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% 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, Ill.

"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% of Molex's revenues come from products sold outside the United States.

Koch, based in Wichita, Kan., 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.

Law Firms Prepare to Investigate

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 U.S. 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.

Copyright Agence France-Presse, 2013

Popular Sponsored Recommendations

Four Common OT Cybersecurity Pitfalls for Manufacturers

April 4, 2023
For the last six years, Dragos has leveraged their Professional Services team to develop an on-the-ground understanding of the realities facing the industrial community and to...

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

How Manufacturers Can Optimize Operations with Weather Intelligence

Nov. 2, 2023
The bad news? Severe weather has emerged as one of the biggest threats to continuity and safety in manufacturing. The good news? The intelligence solutions that build weather ...

Transformative Capabilities for XaaS Models in Manufacturing

Feb. 14, 2024
The manufacturing sector is undergoing a pivotal shift toward "servitization," or enhancing product offerings with services and embracing a subscription model. This transition...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!