Precision Castparts Corp. is buying Titanium Metals Corp. in a deal worth roughly $2.9 billion, the companies announced Friday.
Precision, based in Portland, Ore., will pay $16.50 per share in cash for the Dallas-based titanium melted and milled products company, a 44 percent premium to the company's closing stock on Thursday.
"Timet will provide us with the titanium capability that has always been a key missing piece of our overall product portfolio," Mark Donegan, CEO of Precision Castparts said in a statement.
The deal will allow Precision Castparts to streamline its supply chain and better manage its input costs in core operations. Donegan said that the addition will also help the company as it tries to grow in the aerostructure market that Titanium Metals works with.
Timet, with production facilities in the U.S. and Europe, supplies nearly one-fifth of the world's titanium. The metal is in demand among commercial aerospace manufacturers for jet engine components and airframe structures because it reduces weight and increases fuel efficiency.
The news sent shares of Titanium Metals up more than 40 percent in after-hours trading. Precision's shares increased 5 percent.
Precision and Timet have worked together for a number of years. As a result, Donegan expects the integration of the business to move quickly once the transaction closes, which is expected by year-end.