DORSET-BASED international aerospace and defence group Meggitt has acquired America's K&F Industries Holdings for $1.8 billion (£934 million).

The deal will be funded in part by a one-for-two rights issue at 200p per share, raising approximately £424 million, net of expenses.

It will be underwritten by Rothschild and Merrill Lynch. The balance of the acquisition will be funded by debt.

Aerospace supplier K&F, headquartered in New York, produces wheels, brakes, fuel tanks, helicopter interiors and fuel sealants.

Last year it reported an operating profit of $146.4 million (£75.9 million) on turnover of $424.1 million (£220 million).

Meggitt chief executive Terry Twigger said K&F would "significantly strengthen Meggitt's position as a major international aerospace equipment provider, given our combined operations' complementary product and geographic markets.

"We expect the acquisition to create material synergies and be significantly earnings enhancing in the first full year of ownership."

Yesterday Meggitt, which is based at Bournemouth Airport, reported a 14.1 per cent rise in underlying pre-tax profit to £132.7 million for the year to December 31.

Revenue was up 8.7 per cent at £670.3 million