Eaton, the US industrial equipment manufacturer, has agreed to buy Cooper Industries, an Irish-based maker of electrical equipment, in a deal that values Cooper at about $11.8 billion.
Cooper is almost the same size as Eaton, which has a market capitalisation of about $14.3 billion.
The merged company will be known as Eaton, “or a variant thereof”, and led by Sandy Cutler, Eaton’s chief executive. However, after the deal closes, Eaton will move its registration to Ireland, where Cooper is incorporated.
Mr Cutler said in a statement that the deal would bring together the two companies’ product lines and Cooper’s international distribution to create “a game-changer to serve the electrical industry”. The companies said the deal would generate about $535 million in annual synergies by 2016.
The terms of the offer are $39.15 in cash and 0.775 Eaton shares for each Cooper share. Based on Friday’s closing prices, that makes the offer worth about $72 for a Cooper share, a 29 per cent premium. – Copyright The Financial Times Limited 2012
