Piano maker Steinway sold for $499M

New York, UNITED STATES: The keyboard of a Concert Grand Model D piano is pictured in the final inspection room at the Steinway & Sons factory 26 July 2005 in Long Island City, New York. Steinway, founded in 1853 by German immigrant Henry Engelhard Steinway in a Manhattan loft, sold his first piano for USD 500. A Concert Grand today sells for USD 99,900. AFP PHOTO/Timothy A. CLARY (Photo credit should read TIMOTHY A. CLARY/AFP/Getty Images)

WALTHAM, Mass. The famed piano maker Steinway is being sold for $499 million and will be taken private.

The U.S.-based company terminated an existing sales agreement with Kohlberg & Co. after it was outbid by another investment firm, Paulson & Co.

Paulson beat Kohlberg's offer by $3 per share. Steinway will have to pay a termination fee of about $6.7 million.

Paulson will ultimately pay $40 per share for the company. Steinway valued the sale at about $512 million.

Paulson will open a tender offer for shares of Steinway Musical Instruments Inc. within the next five days.