Ultra Electronics Holdings PLC (LSE:ULE) has agreed on a £2.5bn takeover offer from aerospace firm Cobham PLC (LSE:COB) (LSE:COB).
Shareholders will receive 3,500p for each share in the engineer, plus the interim cash dividend of 16.2p declared last month.
READ: Ultra Electronics confirms increased takeover approach from Cobham
If Ultra declares another dividend, the payout will be deducted from the acquisition value.
The offer comes after an initial 2,800p per share proposal in June. The final price is a 63% premium to the closing price on 24 June, the last business day before the talks started.
Completion is expected in the first quarter next year.
Cobham said it wants to buy Ultra because their activities are complementary and the pair have mutual customers and wider stakeholders, including across the "five-eyes" nations.
After the acquisition, it will sign legally binding contracts that Ultra will continue serving the UK government for national security contracts, protecting jobs and increasing investment in innovation.
“The Ultra board recognises the very significant premium to Ultra's undisturbed share price and to its all-time high share price. The offer price compares favourably to the current value of Ultra's risk adjusted future financial performance,” said Ultra’s chairman Tony Rice.
“The Ultra board has also spent considerable time reviewing the potential impact of Cobham's ownership on Ultra's stakeholders and is comfortable that their stakeholder commitments plus legally binding undertakings to HM Government will protect stakeholder interests appropriately.”