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Eaton Launches Tender Offer To Acquire Phoenixtec Power Company

December 20, 2007 by Jeff Shepard

Eaton Corp. announced that it will offer to buy all shares of Phoenixtec Power Co. Ltd., a Taipei producer of uninterruptible power-supply systems. Eaton’s purchase of all the shares would be valued at US$565 million. Eaton stated that it has commitments from holders of 25% of Phoenixtec to tender their shares to the offer.

Phoenixtec, which employs 5,800 people, estimates Ebitda for 2007 at US$52 million on sales of US$595 million. Closing conditions include a minimum of 51% of the Taiwan company’s shares must be tendered to the offer. Phoenixtec manufactures single- and three-phase uninterruptible power supply (UPS) systems that are sold globally. Phoenixtec has leading positions in UPS markets particularly in China, Southeast Asia, and Eastern Europe.

Alexander M. Cutler, Eaton Chairman and Chief Executive Officer, commented, "The company’s leadership position in the China and Taiwan power quality markets provides us a strong foundation to sell our entire range of power quality products. In addition, the company’s engineering capabilities and its manufacturing facilities in Taiwan and China provide us the products, technical knowledge, and competitive manufacturing footprint to greatly expand our global power quality business."

Eaton also announced the acquisition of The Moeller Group, a leading supplier of components for commercial and residential building applications, and industrial controls for industrial equipment applications. The agreed purchase price is €1.55 billion (US $2.23 billion). The transaction, expected to close in the first quarter of 2008, is subject to regulatory approvals and other customary closing conditions.