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ABB to acquire Thomas & Betts for US$3.9 billion

ABB has announced the acquisition of Thomas & Betts for US$3.9 billion.

According to ABB, the combination of Thomas & Betts’ electrical components and ABB’s low-voltage protection, control and measurement products is aimed at creating a broader low voltage portfolio that can be distributed through Thomas & Betts’ network of more than 6,000 distributor locations and wholesalers in North America, and through ABB’s distribution channels in Europe and Asia.

The combined product portfolio and enhanced distribution network will enable ABB to double its addressable market in North America to approximately US$24 billion.

Joe Hogan, ABB CEO, stated that "strategically, it’s a great fit".

Thomas & Betts will be combined with ABB’s existing North American low voltage products division to become a new business unit led under Thomas & Betts chairman Dominic Pileggi.

ABB secured a US$4 billion debt facility from the Bank of America, which is will use to acquire Thomas & Betts for US$72 per share.

It expects the acquisition will provide approximately US$200 million in annual synergies by 2016.

"This [acquisition] is a unique opportunity for ABB to grow in the largely untapped North American low voltage products market," ABB’s Tarak Metha said.

Under the terms of agreement between the companies, the move is structured as a merger.

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