Two large companies are expecting to acquire key smaller firms in new strategic acquisitions.

3M (News - Alert) has announced it plans to acquire Ceradyne. The deal was valued at $35 a share, and works out to a total of $860 million. Ceradyne’s board has approved the offer.

The transaction is expected to close during the Q4 of 2012, and needs to be approved by regulators and shareholders.

Ceradyne earns about $500 million in revenue. It develops and makes advanced technical ceramics in the auto, oil and gas, solar, industrial, electronics and defense sectors.

Under the deal, the two companies will complement each other in new technology with materials requiring advanced ceramics.

Ceradyne would become part of 3M’s Energy and Advanced Materials Division.

“Ceradyne is a strong company with a great reputation, world-class technology in advanced ceramics, and leadership positions in the markets it serves,” 3M Industrial and Transportation Business executive vice president Chris Holmes, said in a company statement. “Ceradyne is an excellent complement to our existing businesses in transportation, energy markets and defense. By joining 3M, Ceradyne associates will have the opportunity to use the power of 3M’s global reach, culture of commercializing new products and operational discipline to accelerate this platform in serving our customers with highly valued solutions.”

“3M is renowned for its innovation, its R&D and its global reach,” added Joel Moskowitz, CEO at Ceradyne. “This is a great fit and I know that advanced ceramics technologies have a tremendous future within 3M and can contribute to the development of unique solutions for many demanding applications.”

In addition, Honeywell (News - Alert) International plans to pay $525 million in cash for a 70-percent stake in Thomas Russell Co. The company makes equipment used in natural gas production, Reuters reported.

“With the acquisition, Honeywell’s UOP will offer a broad range of key technologies and products that allow shale and conventional natural gas producers to remove contaminants from natural gas and recover high-value natural gas liquids used for petrochemicals and fuel,” according to a company statement.  

“Thomas Russell Co. is a terrific complement to our current business and is particularly well positioned to serve the growing market for processing shale gas, as well as gas from oil fields,” said Andreas Kramvis, president and CEO at Honeywell Performance Materials and Technologies. “With this acquisition, UOP will provide a comprehensive range of key technologies to natural gas producers globally, as well as a broad range of technologies to convert natural gas feedstocks into high-value petrochemicals.”

The deal needs to meet regulatory approvals and is expected to close in the Q4 of 2012. Thomas Russell should earn revenue of about $425 million this year.

In related news, Newman Ferrara LLP, a law firm, is investigating possible claims against the Board of Directors of Ceradyne regarding the proposed acquisition of Ceradyne by 3M.

According to a report carried on TMCnet, the firm questions whether Ceradyne's shareholders will get the maximum value for their stock.

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