Eaton Corp. has agreed to purchase Cooper Industries PLC in a cash-and-stock deal valued at about $11.46 billion that is designed to expand its reach in the global electrical power and distribution industry.
The deal announced Monday would create a company that manufactures products for a wide range of electrical uses, from power grids and lighting to electrical, hydraulic and transmission systems for vehicles, the aerospace industry and the military.
The new company, likely to be called Eaton Global Corp. PLC, will be incorporated in Ireland, where Cooper is based, and headed by Eaton Chairman and CEO Alexander Cutler. The deal needs the approval of shareholders of both companies and the Irish High Court. It is expected to close in the second half of the year.
Cutler told analysts that the combination of the two companies will create a business well-positioned for growth in managing power for customers around the world.
Under terms of the deal, each Cooper stockholder will receive $39.15 in cash and 0.77479 of a share in the newly created company. That combination is worth $72 per share based on Eaton's closing share price of $42.40 Friday. It would be a premium of nearly 29 percent over Cooper's closing stock price Friday.
Eaton stockholders will receive one share of the new company for each Eaton share they own. Eaton stockholders are expected to own about 73 percent of the combined company.
Eaton spokesman Gary Klasen said he would not be able to discuss any impact on jobs until the transaction closed and officials had a chance to evaluate the new company's needs. He said operations in Cleveland would remain intact.
Cooper offers a variety of electrical products, including electrical protection, power transmission and distribution, lighting and wiring components. Eaton, which is based in Cleveland, makes electrical and hydraulic components, systems and services. It also makes aerospace fueling, hydraulic and pneumatic systems for commercial and military use as well as vehicle drive-train and power-train systems.
The new company's shares are expected to trade on the New York Stock Exchange under the "ETN" ticker symbol now used by Eaton Corp.
Shares of Cooper rose $14.04, or 25.1 percent, to close at $69.88 Monday. Shares of Eaton fell 31 cents to $42.09.