Eaton snaps up rival Cooper in £7.5bn deal
Diversified industrial manufacturer Eaton yesterday agreed to buy electrical equipment maker Cooper Industries $11.8bn (£7.5bn) in cash and stock, its biggest-ever acquisition, a move that will lower Eaton’s taxes by shifting its incorporation to Ireland.
American Eaton will pay $72 per share for Cooper: $39.15 in cash and the rest in stock. Eaton shareholders will control almost three-quarters of the new Eaton Global.
The deal will allow Eaton to better participate in an electrical market that is expected to benefit from investment to modernise aging power grids in both mature and developing economies. It will also allow Eaton to expand into lighting and lighting controls, a market poised to benefit from a rebound in commercial construction.
Eaton also cited expected growth from the oil and gas industry, which both Cooper and Eaton serve.
Incorporating in Ireland will shave about $160m a year from Eaton’s tax bill, said Eaton chief executive Sandy Cutler, who will lead the combined company.
“It’s our confidence in the synergies in this particular deal that gave both our boards the conviction (to do this).”
When Cooper incorporated in Ireland last decade, it was one of several US industrial companies, including Ingersoll Rand and Tyco International to do so.