CLEVELAND — Eaton Corp., a diversified industrial manufacturer, announced this week it has agreed to purchase Cooper Industries for $11.8 billion.
Cooper Industries’ vast electrical equipment portfolio includes a range of mass notification systems and fire/life-safety appliances, plus lighting, circuit protectors and wiring devices used in homes and commercial buildings.
The deal will allow the combined company, renamed Eaton Global Corp., to expand its geographic range and increase capabilities to its power management portfolio and electrical business, according to a press release. Eaton, which reported $16 billion of revenue last year, makes power systems for data centers, hydraulics used in machinery and truck transmissions. Cooper reported sales of $5.4 billion in 2011.
“This compelling combination of Eaton’s power distribution and power quality equipment and systems with Cooper’s diversified component brands, global reach and international distribution creates a game changer to serve the electrical industry,” Eaton Chairman and CEO Alexander Cutler says. “We’re excited about bringing together two great companies to create shareholder value and continue our global growth. This combination significantly expands our ability to better serve our customers with their demands for critical energy saving technologies as they address the impact of the world’s growing energy needs.”
Led by Cutler, the newly created company will be incorporated in Ireland. Expected to close in late 2012, the acquisition will reduce Eaton’s cost by $260 million annually by 2016, while adding $115 million a year to revenue. Eaton’s shareholders will control nearly three-quarters of the new business.
“We are extremely pleased to become part of Eaton’s global electrical business,” Cooper Chairman and CEO Kirk Hachigian says. “This combination creates endless opportunities to accelerate growth and serve our global customers through combining technology, distribution, penetrating important vertical industries and entering new emerging markets. The two companies are a perfect fit in every respect.”