Markets: Up

Shares in BTR soared 35 per cent after Siebe, the engineering company, said it would buy the industrial equipment manufacturer in a pounds 4.2bn share swap to create the world's largest maker of factory controls and automation equipment.

Siebe investors will hold 55 per cent of the new company, to be called BTR Siebe. While it expects to boost profits through 5,000 job cuts, some analysts were concerned that BTR's recent losses as a result of the recession in emerging markets would hobble its performance.

Savings from the merger are expected to be pounds 80m in the first year, pounds 160m in the second and pounds 250m in the third year. Siebe chief Allen Yurko will be chief executive of the combined company.