Ford Motor Co. has announced a $512-million deal to buy United States Leasing International, a San Francisco firm that leases business equipment, automotive fleets, electronic gear, aircraft and railroad equipment.
Under the terms of the agreement, Ford will buy U.S. Leasing's 7,384,000 outstanding shares of common stock for $68 each, the companies said in a statement issued Saturday. The tender offer begins Oct. 19.
Stock options included in the merger raise the total value of the transaction to $512 million, a U.S. Leasing spokesman told Reuters.
The leasing firm's board said in the statement that it unanimously approved the merger as fair to shareholders and recommended that they accept the Ford offer and tender their shares.
In trading on the New York Stock Exchange, U.S. Leasing closed Friday at $52.75, up $3.75 a share.
"This transaction is part of Ford's plan to expand its financial services businesses. U.S. Leasing provides an opportunity for the company to add a new business segment to its commercial leasing business," said James Ford, chairman of Ford's finance and insurance subsidiaries.
Ford's financial services subsidiaries include Ford Motor Credit Co. and First Nationwide Financial Corp., with combined assets of $61 billion.
Flush with cash, Ford announced the deal just two days after the board voted to increase its quarterly dividend 25 cents, to $1 a share.
Last week, Ford agreed to contribute more than $1.2 billion toward a $1.3-billion buyout of rental car company Hertz Corp.
U.S. Leasing President D.E. Mundell said the merger would benefit shareholders and USL's 1,700 employees. "We have been assured a good measure of autonomy and, clearly, the combination is an exciting one in terms of business opportunity for us," Mundell said.
He said the company, with assets of $1.5 billion, would remain headquartered in San Francisco, where it was organized 35 years ago.