Diebold in talks to acquire Wincor

Wincor Nixdorf AG jumped the most since its 2004 listing after Diebold Inc. offered 1.57 billion euros ($1.8 billion) to acquire the German company in a bid to create a manufacturer of cash machines and security systems with about $6 billion in sales.

Shares in Wincor Nixdorf closed up 17 percent at 45.55 euros on Monday compared to the offer price of 52.50 euros.

The ratio of the cash and stock component of the offer is still to be negotiated and may be finalised in the next two weeks after due diligence. According to Paderborn, Germany-based Wincor, the companies entered into a term sheet on September 24 “regarding the key parameters of a potential strategic business combination”.

Diebold, based in North Canton, Ohio, contacted Wincor about an acquisition in June, a person familiar with the matter said at the time.

The company is scaling back its hardware unit, while bolstering software and IT services.

Diebold is a little over mid-way through a three-year restructuring program to cut costs, improve its gross margin and shift its business mix.

Wincor is the third-largest maker of ATMs behind leader NCR Corp (NCR.N) and Diebold, which, with a market capitalisation of $2.2 billion, has roughly the same market share as Wincor.

But several mature markets will however continue to decline, research and consulting firm RBR said last week, adding that it saw growth mainly in the Middle East and Africa.

In its latest set of interims, Wincor Nixdorf reported a a continued decline in net sales for the first nine months of the year and a significant fall in operating profits.

United States private equity firms Kohlberg Kravis Roberts and Goldman Sachs Capital Partners acquired the company in 1999 and renamed it Wincor Nixdorf.