ABB to buy Thomas & Betts for $3.9 billion
Swiss engineering group ABB say it has agreed to buy United States electrical components maker Thomas & Betts for $3.9 billion (SFr3.58 billion) in cash.
Under the terms of the deal, which will see ABB broaden its inroads into the world’s largest market for low-voltage products, ABB will pay $72 per share in cash for Thomas & Betts, a 24 per cent premium over the stock’s closing price on Friday.
Zurich-based ABB, which makes products used by oil, mining and utility companies, has looked to expand its presence in North America, buying industrial motor business Baldor Electric for $4.2 billion in 2010.
Memphis-based Thomas & Betts, which competes with companies such as Cooper Industries and Hubbell, makes products ranging from connectors for cables to heating and ventilation products.
ABB, which had some $1 billion in net cash at the end of the third quarter, has been on the prowl for buys to plug gaps in its portfolio and has said acquisitions could potentially add another three to four per cent to its overall growth rate.
Through the deal, ABB will gain access to Thomas & Betts’ network of more than 6,000 distributor locations and wholesalers in North America, allowing it to double the size of its market to $24 billion.
ABB expects some $200 million in annual cost savings from the deal by 2016.
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