ABB Ltd., Engineering Company from Switzerland, has purchased Thomas and Betts, US based electrical equipment maker, for $3.9 billion in order to strengthen its business in North America and to increase the presence of the company in the world’s market for low-voltage products.
With the help of this deal, ABB will gain access to more than 6000 distributor locations in North America.
Under the terms of the deal on Monday, ABB will give $72 per share in cash i.e. 24% premium over the stock’s closing price on Friday.
According to Joe Hogan, ABB’s Chief Executive, this deal would ramp up U.S. market for low-voltage products of about $24 billion for ABB’s profitable product range.
“Thomas & Betts is a well-run company with strong brands and excellent distribution channels in the world’s largest low-voltage products market,” said Hogan. “Because our products are complementary, we’ll go to market with one of the broadest offerings in the industry. That creates strong growth opportunities for both ABB and Thomas & Betts, and gives customers and distributors one-stop access to one of the widest ranges of low voltage products.
“Strategically, it’s a great fit,” Hogan added. “This is another big step toward our goal of expanding our presence in the key North American market. The transaction clearly supports our 2015 growth and profitability targets, and meets all of our return-on-investment criteria for creating shareholder value.”
“This transaction delivers significant value to our shareholders and will enable Thomas & Betts to accelerate our global growth strategy,” said Thomas & Betts Chairman and CEO Dominic J. Pileggi. “The combination will also enable us to provide our North American customers and distributor network with a broader portfolio of products and will provide long-term opportunities to our employees. This is the right time for this transaction and I believe strongly that ABB is the right partner for our business going forward.”