Honeywell International is buying the utility consumption meter business of Melrose Industries for £3.3 billion to boost its presence in high-growth regions.

Melrose shares jumped 16 per cent in early trading, making it the top percentage gainer on the FTSE-250 midcap index.

The all-cash deal for Melrose's Elster division will have a minor dilutive impact on its 2016 earnings per share, Honeywell said in a statement.

Melrose, an engineering turnaround specialist that follows a buy-improve-sell strategy akin to private equity firms, said separately that it would return £2bn to shareholders after the sale.

"Elster's gas business offers products in high demand among natural gas customers and brings a strong, global distribution network and numerous cross-selling opportunities for existing Honeywell technologies," Honeywell said.

Elster, which also makes flow computers and regulators for the gas industry, is estimated to post sales of $1.8 billion in 2015. It employs about 6,800 people across the United States, Germany, the UK and Slovakia.

"Elster also creates a new platform for acquisition targets for Honeywell," Honeywell chief executive Dave Cote said.

Honeywell makes aircraft parts and climate control systems.