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Eaton Global Corp.

Eaton Corp. to buy fire & security parent company for $11.5b

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Tuesday, May 22, 2012

Eaton Corp.—a $13.7 billion diversified power management company that provides electronic components for the aviation and transportation sectors and whose CISO Gareth Webley delivered the keynote address at TechSec 2011 —announced yesterday that it’s acquiring Cooper Industries in an $11.46 billion cash-and-stock deal. Cooper Industries’ Cooper Safety business is a provider of fire, security, and mass notification equipment, among other products.

Here’s a story Tess wrote in May 2011 about a new training/research center that its CooperNotification (which specializes in mass notification equipment) opened last year.

After the closing, Eaton will move no longer be incorporated in the U.S. It will be domiciled in Ireland, which is where Cooper Industries' is incorporated.

Eaton is talking about how the move will “significantly increase the capabilities and geographic breadth of the combined company’s power management portfolio and electrical business.”

However, a Rueters story pointed out that Eaton is one of several corporations (including Tyco Flow Control, a soon-to-be former division of Tyco International) that have made plans to move offshorte and expect to gain tax advantages from doing so.

Asked about any planned changes to the fire and security operations, an Eaton spokesperson told me that the company would not be commenting on elements of the Cooper Industries’ businesses until after the transaction closes in the second half of 2012.

And on the benefits of moving offshore, he said. “There will be some global cash management and tax benefits as well as some [business] synergies.”
 
Eaton Chairman and CEO Alexander Cutler will head up the new company, which will likely be called “Eaton Global Corp.”

Under terms of the deal, each Cooper stockholder will receive $39.15 in cash and 0.77479 shares of the newly created company. That combination is worth $72 per share based on Eaton's closing price of $42.40 on Friday. Cooper currently has 159.1 million outstanding shares.