Engineer IMI (LON:IMI) is planning to return £620 million in cash to shareholders after offloading two of its non-core businesses.
The FTSE 100 group is selling its beverage dispense and merchandising divisions for £690mln to Marmon Group, a company owned by Warren Buffett’s Berkshire Hathaway.
The sales will see the company focus on industrial end markets.
It has opted to return £620mln of the sales proceeds to shareholders, who will have the choice to take the cash or receive the pay-out in shares, which will be accompanied by a share consolidation.
The remaining £70mln will go into IMI's pension fund.
It follows a share buyback programme announced in March, aimed at repurchasing up to £175mln of shares over twelve months. So far, it has bought back £85mln of shares.
Chief executive Martin Lamb called the disposals “a major step for IMI”.
“It positions IMI as a highly differentiated, market leading flow control business focused entirely on industrial end markets,” he said.
IMI’s beverage division, which makes valves for drinks machines, accounted for around 14% of revenues, while the merchandising arm, making marketing displays, made up 8% of turnover.