American foodservice equipment provider Middleby has agreed to buy smaller contender Welbilt in an all-stock transaction valued at $2.9bn.

The deal will expand Middleby’s commercial foodservice platform with the addition of a portfolio of products, brands and technologies.

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It will also accelerate the company’s growth strategy into key markets internationally and increase core capabilities in various segments.

Furthermore, the transaction will boost R&D and investment into value-added technologies and services, such as ventless cooking, controls, automation and connectivity.

Middleby CEO Timothy FitzGerald called the acquisition of Welbilt a ‘transformational opportunity’ for the company.

FitzGerald said: “The combination of our two great companies creates a leading player with a comprehensive product line, global footprint and advanced technologies and solutions that are well positioned to serve our rapidly changing customer needs and capitalise on emerging industry trends.”

The combined entity will have approximately $3.7bn in sales for 2020, with the commercial foodservice segment accounting for 73% of the total.

As part of the deal, Welbilt board chairman Cynthia Egnotovich and CEO William Johnson will join Middleby’s board as directors.

Commenting on the development, Johnson said: “We are pleased to combine with Middleby to offer our customers a broad and innovative portfolio of products and technologies.

“This transaction will allow Welbilt to accelerate our strategic development and represents an outstanding opportunity for Welbilt shareholders to realise an attractive value and participate in the future value creation of the combined organisation.”

The transaction is expected to close later this year, subject to customary closing conditions.

Last December, Middleby acquired China-based United Foodservice Equipment Group for an undisclosed amount.