A counteroffer from Emerson Electric Co. (www.emerson.com) has caused ABB Ltd. (www.abb.com) to pull out of the bidding to acquire Chloride Group PLC (www.chloridepower.com), a London-based producer of uninterruptible power supplies.
In a brief statement issued July 1, ABB, based in Zurich, said that it has reviewed the offer announced by St. Louis-based Emerson on June 29 of 375 pence per Chloride share and has decided not to match Emerson’s offer. “While we still see considerable value in the combination of ABB and Chloride and have a high regard for the Chloride management team, we must take a disciplined approach when assessing potential acquisitions,” said Joe Hogan, ABB’s chief executive officer.
Emerson’s June 29 cash offer for Chloride is valued at 997 million pounds ($1.5 billion). “The merits of the deal for both companies are compelling,” said Emerson Chief Executive Officer and President David N. Farr in a statement. “The UPS market has become a place where specialist industry knowledge, geographic access and global scale are more important than ever before. The geographic reach and offerings of Emerson and Chloride are highly complementary and highlight the strategic importance of the transaction. In addition, the combination with Chloride is expected to deliver significant annual cost savings of at least 33 million pounds through purchasing and manufacturing efficiencies, staff and facility reductions, and the elimination of other business cost structure duplications including overhead reductions.”
The latest Emerson offer tops ABB’s June 8 offer of about 860 million pounds ($1.3 billion), and comes following Chloride’s rejection of an earlier offer by Emerson in April of about 723 million pounds ($1 billion).
ABB Ltd.
www.abb.com
Chloride Group PLC
www.chloridepower.com
Emerson Electric Co.
www.emerson.com
