SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 31, 1997
ALLEGHENY TELEDYNE INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 1-12001 25-1792394
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1000 SIX PPG PLACE, PITTSBURGH, PENNSYLVANIA 15222-5479 (Address of
principal executive offices) (Zip code)
Registrant's telephone number, including area code: 412-394-2800
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Item 5. Other Events.
On October 31, 1997, Allegheny Teledyne Incorporated issued a press
release, a copy of which is filed as Exhibit 99.1 hereto.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits. The following exhibit is filed as part of this Current
Report on Form 8-K:
Exhibit
Description No.
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Press Release dated October 31, 1997 99.1
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Allegheny Teledyne Incorporated
Date: November 3, 1997 By: /s/ Jon D. Walton
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Senior Vice President-General
Counsel and Secretary
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EXHIBIT INDEX
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Exhibit
No. Description
- ------- -----------
99.1 Press Release dated October 31, 1997
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Exhibit 99.1
Contact: For Allegheny Teledyne
Bill Acton
412/394-2872
Gary Stechmesser
412/394-2861
Dan Greenfield
412/394-3004
For Oregon Metallurgical
Dennis P. Kelly
541/967-9000
ALLEGHENY TELEDYNE AGREES
TO ACQUIRE OREMET
IN $560 MILLION MERGER
All-Stock Transaction Expected to Be Accretive
to Earnings and Cash Flow in First Year
Operating Synergies Expected to Grow to More than
$45 Million Annually
Pittsburgh, PA, October 31, 1997 --- Allegheny Teledyne Incorporated (NYSE:ALT)
and Oregon Metallurgical Corporation (Nasdaq:OREM) today announced that they
have entered into a definitive merger agreement in which Allegheny Teledyne will
acquire Oregon Metallurgical (Oremet) as a wholly-owned subsidiary and each
outstanding share of Oremet common stock will be converted into 1.296 shares of
Allegheny Teledyne common stock. Allegheny Teledyne is a technology-based
manufacturing company with a concentration in specialty metals. Oremet is an
integrated titanium producer.
The $560 million transaction provides Oremet shareholders with an approximate 11
percent ownership of the combined company and a 45% premium, based on the
closing prices of the outstanding common stock of the two companies on October
31, 1997. The merger is expected to be tax free to Oremet shareholders and will
be accounted for under the pooling of interest method.
Richard P. Simmons, Chairman, President and Chief Executive Officer of Allegheny
Teledyne, said, "Our Board of Directors believes that the merger will provide
significant cost reductions, sales opportunities, and financial advantages. We
expect the transaction to be accretive to earnings and cash flow in the first
year.
"Oremet is an excellent strategic fit with the specialty metals segment of
Allegheny Teledyne. The acquisition further strengthens and improves the
competitiveness of the specialty metals segment. It provides the opportunity to
realize
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significant synergies in marketing, operations and purchasing at our Wah Chang,
Allvac and Allegheny Ludlum companies. Also, this transaction should allow the
companies to avoid duplication of new capital investment in the future."
Simmons added that Allegheny Teledyne believes that integrating its operations
with Oremet will result in continuing operational cost improvements and sales
synergies worth more than $15 million in pre-tax earnings in the first full year
and over $45 million in pre-tax earnings by the end of the third full year after
the merger closes.
He continued, "The senior management of Oremet, led by Mr. Carlos E. Aguirre, is
expected to play an important role in the management of the metals segment. Mr.
Aguirre will head a high performance group of companies including Wah Chang,
Allvac and Oremet, reporting to Arthur H. Aronson, Allegheny Teledyne executive
vice president and specialty metals segment executive."
Aguirre, Chairman, President and Chief Executive Officer of Oremet, said, "The
transaction with Allegheny Teledyne will provide Oremet shareholders with a
significant premium on their investment. It also strengthens the prospects for
Oremet's long-term growth. Our shareholders will be able to participate in the
new business opportunities this merger creates.
"The merger will enable Oremet to utilize Allegheny Teledyne production
facilities for titanium bar, forged products, and flat rolled production of
sheet, strip and plate, which will permit Oremet to shift to higher value added
products. At the present time, a significant portion of Oremet's sales are
titanium sponge and ingot products."
The companies said that the complementary nature of their businesses also will
improve the ability of the combined operations to serve customers and enhance
the competitiveness of Allegheny Teledyne and Oremet in the global marketplace.
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The following table shows pro forma sales for the twelve months ended September
30, 1997:
Business Segment Sales Percent of
($ millions) Total
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Specialty Metals
- Stainless steel $1,000 25%
- Titanium 426 11
- Nickel-based super alloys 274 7
- Other specialty metals 643 16
Subtotal 2,343 59
Aerospace and Electronics 895 22
Industrial 432 11
Consumer 307 8
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TOTAL $3,977 100%
Combined net income of the two companies, based on pro forma financial results
for the 12-month period ending September 30, 1997, was $298 million. Combined
assets totaled $2.9 billion. Simmons said, "This acquisition meets our criteria
for high return on capital employed and high return on equity. Oremet's strong
balance sheet fits very well with Allegheny Teledyne's strong financial
position. Pro forma combined net equity is nearly $1.2 billion; net debt to
total capitalization improves to about 22.7 percent."
The transaction is subject to the approval of the shareholders of Oremet, as
well as customary regulatory approvals and closing conditions. The board of
directors of Allegheny Teledyne received advice from Goldman, Sachs & Co., and
the board of directors of Oremet was advised by Salomon Brothers Inc. in
connection with their approvals of the merger agreement.
As noted, the merger will be accounted for as a pooling of interests. The
pooling treatment should not restrict any of Allegheny Teledyne's previously
announced plans for selling non-strategic businesses. Effective immediately,
Allegheny Teledyne's stock repurchase program has been terminated. The company
repurchased approximately 3.7 million shares on the open market under the 12
million-share repurchase program initiated earlier this year.
Allegheny Teledyne Incorporated, which has about 24,000 employees, is a group of
technology-based manufacturing companies with significant concentration in
specialty metals, complemented by aerospace and electronics, industrial, and
consumer products. Its specialty metals companies include:
Allegheny Ludlum, a major producer of stainless steels and other specialty
metals;
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Wah Chang, a leader in the production of reactive and refractory metals,
including zirconium, hafnium, niobium, tantalum, and high purity titanium;
Allvac, which produces superalloys and other specialty metals, including
titanium.
Oregon Metallurgical Corporation is an integrated producer and distributor of
titanium sponge, ingot, mill products and castings for use in the aerospace,
industrial, recreational, and military markets. The company, which has 850
employees, operates manufacturing and finishing facilities in Albany, OR and
Pennsylvania and has nine service centers in the United States, with additional
centers in the United Kingdom, Germany, Singapore, and Canada.
This news release contains forward-looking statements, including those related
to the anticipated acquisition, sales, earnings, cash flow and cost savings.
Realization of the anticipated results could take longer than expected and
implementation difficulties and market factors could alter the anticipated
results. Actual results could differ materially from those projected in the
forward-looking statements. Additional information concerning factors that could
cause actual results to differ materially from those projected in the
forward-looking statements is contained in the filings with the Securities and
Exchange Commission, including reports on Form 10-K for the year ended December
31, 1996.
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