Wall Street Journal is reporting that according to unnamed sources, Swiss-Swedish multinational engineering company ABB (SIX: ABBN, OMX: ABB, NYSE: ABB) is closing in on another big acquisition. The paper says that ABB is negotiating with Memphis, Tennessee, USA based Thomas & Betts (TNB). TNB makes electrical connections and components and has also diversified to fields such as heating and ventilation (HVAC) equipment, and transmission towers. Its most known product over here is the cable tie.
For fiscal year 2010, TNB’s sales were slightly above 2 billion USD and its net income was around 145 million. The company is set to report 2011 earnings tomorrow. WSJ is saying that a deal could be in the 4 billion Dollar range, which would represent near 30% premium on current market cap, and might be announced as early as Monday. Yet the paper said the same sources warned that the deal might still fall apart, so read into this as you will; undoubtedly we will hear something more tomorrow. ABB’s fourth quarter report is not due for another two weeks.
***UPDATE MONDAY MORNING***
The companies have reached an agreement for ABB to purchase Thomas & Betts for 3.9 billion in cash. ABB highlights that it is getting access to a network of over 6000 distributors and wholesalers in North America and doubles it low-voltage products market offering in the region. The companies feel that their products are very complimentary and give an opportunity to reap synergy benefits. ABB is getting 4 billion in bridge financing from Bank of America Merrill Lynch, which might explain how the news broke, and will repay that through a combination of cash and debt issuance.
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