Emerson Electric Co.’s (EMR: 43.40 0.00 0.00%) offer of 375 pence per share has been accepted by Chloride Group Plc. (CDGPY: 0.00 N/A N/A) after being approved by its Board of Directors. ABB Ltd. (ABB: 17.69 0.00 0.00%), a leading power and automation technology company, withdrew its bid for Chloride in response to Emerson’s latest offer of 375 pence per share in cash.ABB’s withdrawal from the bid made Emerson very likely to succeed in acquiring Chloride, a London based worldwide provider of secured power solutions. The new offer of Emerson values Chloride at GBP1 billion ($1.5 billion).
The bidding process started in April 2010 at 296 pence per share from Emerson, valuing Chloride at GBP723 million ($1.1 billion). However, the Board of Chloride considered the offer from Emerson as a significant undervaluation of the company and rejected the proposal.
Subsequently, in June 2010 ABB made a cash offer of GBP864 million ($1.25 billion) or 325 pence per share for Chloride. The offer was approved by Chloride’s board of directors.
ABB, one of the world’s leading engineering companies, is engaged in providing sustainable solutions to its customers to effectively use electrical power and increase industrial productivity.
The addition of Chloride will help Emerson to expand its activity worldwide and broadens its portfolio of power supply products. Besides its cash offer for shares, Chloride shareholders would also receive a final dividend of 3.3 pence per share for the year ending Mar 31, 2010.
Emerson reported revenues of $20.9 billion and a net profit of $1.7 billion in 2009. Emerson’s earnings per share guidance for 2010 of $2.20-$2.40 include a favorable impact from acquisitions to the tune of 4%.
Based in St. Louis, Missouri, Emerson Electric is a diversified global manufacturing and technology company. It offers a wide range of products and services in the areas of process management, climate technologies, network power, storage solutions, professional tools, appliance solutions, motor technologies, and industrial automation.We currently maintain our Neutral recommendation on Emerson Electric.
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