GUELPH, Ont. — Linamar Corp. stock was up about 10 per cent at midday, following its agreement to buy Winnipeg-based agriculture equipment maker MacDon Industries Ltd. for $1.2 billion.
Shares of the Guelph, Ont.-based auto parts company (TSX:LNR) were at $72.01 at about noon, up $6.99 from Thursday's close.
It's Linamar's best day on the market since Nov. 7, when it reported a drop in third-quarter earnings compared with a year ago and missed analyst estimates.
The MacDon deal will allow Linamar to further diversity its operations, which make precision metallic parts for a range of sectors including automobiles.
Linamar says the acquisition will also complement its existing agricultural harvesting business in Hungary.
CIBC analyst Todd Coupland says that agricultural equipment businesses generally trade at higher valuations than auto parts suppliers.
CIBC also estimates MacDon will add about 70 cents per share of earnings to its 2018 estimate for Linamar.
The company has 59 manufacturing facilities globally and about 24,500 employees.