Swiss-Swedish electrical engineering group ABB has made an offer to buy the UK maker of specialised electrical equipment, Chloride, for £860 million.
The offer will allow Chloride to become ABBÔÇÖs centre for uninterruptible power suppliesÔÇöthe UK groupÔÇÖs specialism. Uninterruptible power supplies are crucial for ABBÔÇÖs key customers such as utilities and heavy industry, but the technology can also be found in other sectors, such as healthcare, travel and finance. The technology protects against power shortages in locations where a constant supply is critical.
ABB said it would integrate Chloride into its Discrete Automation and Motion division.
It is thought that ABBÔÇÖs offer could trigger a bidding war, as ABBÔÇÖs US rival, St Louis-based Emerson, also made an offer of ┬ú723 million in April.
However, ABB officials have said that their bid has been recommended by ChlorideÔÇÖs board, as well as pointing out that Emerson also made another unsuccessful attempt to buy Chloride two years ago.
Analysts have suggested that potential rival bids for Chloride could come from FranceÔÇÖs Schneider Electric.
Commenting on the deal, Joe Hogan, ABBÔÇÖs CEO, said: ÔÇ£The combination of ChlorideÔÇÖs strong position in the fast-growing medium- to high-power UPS business with ABBÔÇÖs global reach and complementary power and automation offering provides significant growth opportunities for both businesses.
ÔÇ£The transaction is in line with our strategy to acquire companies especially in areas where demand is converging across both of these businesses.ÔÇØ
Ulrich Spiesshofer, head of the Discrete Automation and Motion division, added: ÔÇ£ChlorideÔÇÿs strength in UPS solutions and ABBÔÇÖs existing offering will provide customers with a very attractive package to ensure power quality and critical power supply. Chloride would become the global center for UPS within ABB.ÔÇØ
Chloride employs about 2,500 people and reported revenues of £336 million in its fiscal year ended March 31. ABB operates in around 100 countries and employs about 117,000 people.
ABB is drawing on its $5 billion cash pile which it has been using recently to fund acquisitions. Its purchase of Chloride comes just weeks after it agreed a $1 billion takeover of US software Ventyx.
It also recently bought the US measurement product maker K-TEK for an undisclosed price.
