Eaton Acquires Cooper Industries for $11.8 Billion

May 21, 2012
Company says deal provides growth opportunities with complementary product lines and increased global reach.

Diversified industrial manufacturer Eaton Corp. (IW 1000/287) said on Monday it is purchasing electrical equipment supplier Cooper Industries plc (IW 1000/675) in a move designed to expand the combined companys growth into the global electrical industry.

The combined company is expected to be called Eaton Global Corporation plc and will be led by Alexander M. Cutler, Eaton's current chairman and CEO. The new Eaton will be incorporated in Ireland, affording the firm significant tax benefits.

Under terms of the deal, Cooper shareholders will receive $39.15 per share in cash and 0.77479 shares of common stock for a 29% premium.

Eaton said the combined companies would have had historical 2011 revenues of $21.5 billion and EBITDA of $3.1 billion. It expects the deal to generate annual savings of $535 million by 2016.

This compelling combination of Eatons power distribution and power quality equipment and systems with Coopers diversified component brands, global reach and international distribution creates a game changer to serve the electrical industry, said Cutler. Were excited about bringing together two great companies to create shareholder value and continue our global growth.

Kirk Hachigian, chairman and CEO of Cooper, said the "two companies are a perfect fit in every respect.

Eaton secured $6.75 billion in bridge financing for the deal from Morgan Stanley and Citibank.

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