GENEVA (AP) — Swiss
engineering group ABB Ltd. said Monday that it has agreed to pay $3.9 billion
in cash for Thomas & Betts Corp., a deal that boosts its market presence in
North America.
The Zurich-based maker of
power and automation technology and the Memphis, Tennessee-based supplier of
low-voltage products jointly announced that both companies' boards have agreed
to ABB paying $72 a share for the U.S. company. The board of Thomas & Betts
has recommended the deal to its shareholders.
ABB, a market leader for
industrial motors, described the deal as part of a strategy that boosts its
market presence in North America, and said the price of $72 a share is a
24-percent premium over Thomas & Betts' closing stock price on Jan. 27.
The Swiss company has about
130,000 employees spread among operations in 100 nations. In the U.S., ABB is
headquartered in Cary, North Carolina, and has 18,000 workers. It reported $5
billion in revenues for the first nine months of 2011.
Thomas & Betts employs
about 9,400 people and is forecast to report 2011 revenues of about $2.3
billion.
Through the deal the Swiss
firm said it expects to save costs and gain revenues of about $200 million a
year by 2016.
ABB expects the deal to
close sometime in the second quarter, subject to regulatory approvals. Bank of
America Merrill Lynch is helping finance it.
ABB Chief Executive Joe Hogan
called the acquisition "a great fit" It is his firm's largest such
deal since ABB's purchase of Baldor Electric Co. in 2010.
"Thomas & Betts is
a well-run company with strong brands and excellent distribution channels in
the world's largest low-voltage products market," Hogan said. "This
is another big step toward our goal of expanding our presence in the key North
American market."
A year ago the Justice
Department's antitrust division approved ABB's $3.1 billion acquisition of
Baldor, a Fort Smith, Arkansas-based industrial-motor company.
Copyright
2012 The Associated Press.