Swiss engineering group ABB has agreed to buy electrical components maker Thomas & Betts (NYSE:TNB) for $3.9 billion to grow its portfolio of low-voltage products and further expand its geographic scope.
The $72-a-share deal represents a 24% premium to Thomas & Betts’ closing price on Jan. 27.
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The acquisition will enable ABB to reach Thomas & Betts’ network of more than 6,000 distributors and wholesalers in North America. It already has a heavy presence throughout Europe and Asia and expects this deal to double its addressable market in North America to about $24 billion.
“Thomas & Betts is a well-run company with strong brands and excellent distribution channels in the world’s largest low-voltage products market,” ABB chief executive Joe Hogan said in a statement. “Because our products are complementary, we’ll go to market with one of the broadest offerings in the industry.”
Memphis-based Thomas & Betts, combined with ABB’s North American low-voltage products business, will become a new global business led out of Memphis by its current CEO Dominic Pileggi. The 9,000 Thomas & Betts employees are expected to join ABB’s 130,000-person global workforce, including 18,000 employees in North America.
Thomas & Betts reported stronger-than-expected quarterly sales on Monday and a 31% increase in profit, led by its electrical, HVAC and steel structures businesses.
Its deal with ABB is slated to close by the middle of this year pending regulatory and shareholder approvals.