Emerson makes counter offer for Chloride

US-based Emerson Electric Co. has countered ABBÔÇÖs recent offer to buy the UKÔÇÖs Chloride Group with its own offer of ┬ú997 million (approximately $1.5 billion).  The offer, at 375 pence a share, is 15 percent higher than Switzerland-based ABBÔÇÖs 325 pence a share bid, which was announced on June 8 and accepted by Chloride.  Emerson took its offer directly to shareholders after management at Chloride reportedly spurned prior approaches. Emerson has outlined annual operating cost savings of at least ┬ú33 million (approx. $49 million) through purchasing and manufacturing efficiencies as well as through the reduction of workers and facilities.  Commenting on the offer, David N. Farr, chairman, chief executive officer and president of Emerson, said: ÔÇ£As participants in the uninterruptible power supply (UPS) market, we believe there is a stronger rationale for a deal between Chloride and Emerson and therefore, we think EmersonÔÇÖs offer merits approval by ChlorideÔÇÖs board and shareholders.  ÔÇ£The merits of the deal for both companies are compelling. 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.ÔÇØ  Farr went on to say: ÔÇ£With EmersonÔÇÖs extensive presence in the emerging markets, Emerson expects to leverage these capabilities to significantly enhance ChlorideÔÇÖs growth by accelerating the penetration in these key markets.ÔÇØ  Emerson also said in its statement that it is committed to the UK market and expects to build on ChlorideÔÇÖs expertise to grow the combined business. The US company would intend for Chloride to serve as EmersonÔÇÖs new European Network Power Systems headquarters and form the basis for EmersonÔÇÖs European UPS growth strategy.  Farr concluded by saying: ÔÇ£This offer demonstrates the strategic value that Emerson places on Chloride and the determination Emerson has in securing the support of ChlorideÔÇÖs board and shareholders and concluding a transaction.ÔÇØ  When ABB made its bid, Ulrich Spiesshofer, head of the companyÔÇÖs Discrete Automation and Motion division, said: 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  Emerson's latest offer is being made through vehicle Rutherfurd Acquisitions.  London-based Chloride employs about 2,500 people and reported revenues of ┬ú336 million in its fiscal year ended March 31.  Headquartered in St Louis, Missouri, Emerson has approximately 129,000 employees and 250 manufacturing locations worldwide.