ABB to acquire Thomas & Betts for $3.9 billion, expands access to North American market
The complementary combination of Thomas & Betts’ electrical components and ABB’s low-voltage protection, control and measurement products would create a broader low voltage portfolio that can be distributed through Thomas & Betts’ network of more than 6,000 distributor locations and wholesalers in North America, and through ABB’s well established distribution channels in Europe and Asia. The combined product portfolio and enhanced distribution network will enable ABB to double its addressable market in North America to approximately $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,” said Joe Hogan, ABB’s CEO. “Because our products are complementary, we’ll go to market with one of the broadest offerings in the industry. That creates strong growth opportunities for both ABB and Thomas & Betts, and gives customers and distributors one-stop access to one of the widest ranges of low voltage products.
“Strategically, it’s a great fit,” Hogan added. “This is another big step toward our goal of expanding our presence in the key North American market. The transaction clearly supports our 2015 growth and profitability targets, and meets all of our return-on-investment criteria for creating shareholder value.”
Thomas & Betts, combined with ABB’s North American low-voltage products business, will become a new global business unit led out of Memphis, TN, under the leadership of Thomas & Betts Chairman and CEO Dominic J. Pileggi.
ABB expects the transaction will deliver approximately $200 million in annual synergies by 2016. The majority of cost synergies are expected to come from sourcing and purchasing efficiencies. The transaction is subject to approval by Thomas & Betts shareholders as well as to customary regulatory approvals, and is expected to close by the middle of 2012.
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