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The transaction is subject to approval by Thomas & Betts shareholders as well as regulatory approvals, and is expected to close by the middle of 2012.
According to the companies, 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 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.”
“This transaction delivers significant value to our shareholders and will enable Thomas & Betts to accelerate our global growth strategy,” said Dominic J. Pileggi, Thomas & Betts chairman and CEO. “The combination will also enable us to provide our North American customers and distributor network with a broader portfolio of products and will provide long-term opportunities to our employees. This is the right time for this transaction and I believe strongly that ABB is the right partner for our business going forward.”
Thomas & Betts, combined with ABB’s North American low-voltage products business, will become a new global business unit led out of Memphis, Tenn., under the leadership of Pileggi.
Thomas & Betts’ main business is the manufacture of low-voltage and ultralow-voltage electrical products such as connectors, conduits, and fittings as well as wiring management products for the construction, industrial, and utilities markets. These are complementary to the offering of ABB’s Low Voltage Products division.
Thomas & Betts also produces HVAC products under the Reznor® and Gaz Industrie® brands for commercial and industrial applications.
Under the terms of the agreement, the transaction is structured as a merger requiring approval of a majority of Thomas & Betts shareholders at a special meeting, which is expected to take place in the second quarter. Closure of the transaction is also conditioned on customary regulatory approvals, including in both North America and Europe.
Publication date: 02/06/2012