The acquisition, which almost triples Wassall's size, will be partly funded by a one-for-four rights issue at 250p to raise pounds 92.2m, with the balance funded from its own resources.
General Cable, formed by American Premier Underwriters as a holding company for its engineering division, is a leading producer of wire and cable products in the US.
Since Wassall lost its bid for Evode in 1992 the City had been awaiting its next move. Christopher Miller, chief executive, had indicated that 1994 would be the year of 'the big one'.
The deal received a vote of confidence with an 18p rise in the shares to 320p. The US cable industry is extremely competitive, but analysts were confident Wassall would be able to raise General Cable's margins from 2.5 per cent to about 4 per cent while squeezing costs significantly.
Peter Wyatt, of Smith New Court, said: 'Overall it looks an extremely good deal, done at a good price. It will be fairly enhancing for earnings.'
Wassall has conditionally agreed to buy about 54 per cent of General Cable for dollars 34.5m and is making a recommended tender offer for the remaining shares for dollars 38.1m.
Wassall is also acquiring from APU a subordinated promissory note issued by General Cable for dollars 169.8m. Wassall will pay a further dollars 27.4m in return for APU taking on responsibility for certain General Cable liabilities.
Mr Miller said General Cable had suffered from under-investment and he planned to upgrade plant and machinery. This investment would be in 'tens of millions of dollars, not hundreds'.
He said: 'The acquisition will allow us to benefit further from the improvement in the economy in the United States and will play an important role in the continued growth of Wassall.'
General Cable's sales last year were about pounds 500m but it made operating profits of just pounds 1.6m. Wassall's turnover was pounds 275m.
The company employs 4,600 people at 22 sites in the US and others in Mexico and Canada.