Factbox: What makes Draka a hot takeover target

AMSTERDAM (BestGrowthStock) – Sought-after Dutch cable manufacturer Draka (DRAK.AS: ) has attracted three takeover offers in five weeks.

Here is an overview of Draka’s assets and what appeals to its suitors, China’s Xinmao Group, Italy’s Prysmian (PRY.MI: ) and France’s Nexans (NEXS.PA: ).

COMMUNICATIONS

Draka is a market leader in telecommunication and data communications wires. Its leading position in optical fiber — No.1 in China and Europe, and No.4 in the United States — is what prompted Xinmao to gatecrash Draka’s deal with Prysmian.

Communications accounted for 36 percent of Draka’s 2009 sales as the company is one of few industrial firms with proprietary technologies in telecommunication cables — Corning (GLW.N: ), Fujikura (5803.T: ) and Furukawa Electric (5801.T: ) are others.

This means Draka is often called in for highly specialized work. For example, it supplied and installed optical fiber cables at CERN’s Large Hadron Collider, the world’s biggest particle accelerator.

Prysmian made only 11 percent of its sales through telecommunications wires in 2009, so a takeover of Draka would boost that side of its business.

Nexans’s chief executive said the telecommunications unit would be sold if it acquired Draka.

ENERGY AND INFRASTRUCTURE

Draka is a top-three provider of cables for the construction and utilities market in Europe, tapping demand for the replacement of aging power grids. It is also a market leader in Singapore and Hong Kong.

Energy and infrastructure accounted for 32 percent of Draka’s 2009 revenue. The company has developed a niche by offering fire-resistant and halogen-free cable, making it popular among clients looking to comply with safety regulations.

Draka has provided cables for lighting and small power applications to Britain’s London Underground. In the event of a fire, these ensure electrical circuits maintain their integrity so that escape routes up and down the subway line remain illuminated.

For Nexans, the energy business is Draka’s most attractive feature. Prysmian is also eyeing the world’s major power transmission projects and wants to combine its subsea and high voltage operations with those of Draka.

INDUSTRY AND SPECIALITY

Draka has developed tailor-made cables for industry and specialty sectors ranging from aircraft and oil platforms to elevators and wind farms.

Industry and specialty made up 32 percent of Draka’s 2009 sales. It is a market leader in elevator cables in North America, first globally in wind turbine cables, and the world’s largest independent supplier of advanced automotive cables.

Draka designed and provided cables for the 58 lifts of the world’s tallest skyscraper, Dubai’s Burj Khalifa, which towers 828 meters above the ground.

By taking over Draka, Prysmian is looking to become the world’s leading industry and specialty cable player in markets such as oil and gas, renewable energy, elevators, crane and mining. Draka’s niches would also buoy Nexan’s industrial unit.

(Sources: company financial reports)

(Reporting by Greg Roumeliotis; Editing by Sara Webb and Erica Billingham)

Factbox: What makes Draka a hot takeover target