ABB offers to buy Chloride Group PLC
ZURICH -- ABB has announced a recommended offer to acquire U.K.-based Chloride in order to establish a leading presence in and help to meet the growing demand for uninterruptible power supplies (UPS).
The boards of directors of both companies have agreed on a recommended offer price of 325 pence per share. The offer price values the business at approximately 860 million pounds. Chloride shareholders will also be entitled to receive a final dividend of 3.3 pence per share as proposed on 24 May 2010. The acquisition is subject to approval by Chloride shareholders, the U.K. High Court and certain regulatory authorities.
"The combination of Chloride's strong position in the fast-growing medium- to high-power UPS business with ABB's global reach and complementary power and automation offering provides significant growth opportunities for both businesses," said Joe Hogan, ABB's CEO. "The transaction is in line with our strategy to acquire companies especially in areas where demand is converging across both of these businesses."
Chloride's UPS offering is used in applications where power quality and security are critically important. This includes ABB's traditional utilities and industrial customer base such as the oil, gas and petrochemicals industries, as well as new sectors in service industries such as data centers, financial institutions, hospitals and airports. The company has a strong service offering and a significant installed base.
Chloride would be integrated into ABB's Discrete Automation and Motion division. "Chloride's strength in UPS solutions and ABB's 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," said Ulrich Spiesshofer, head of the Discrete Automation and Motion division.
ABB's power and automation offering for UPS customers includes drives, high- and medium-voltage switchgear, transformers, as well as low-voltage products and systems. With the integration of Chloride, ABB would be able to offer a broad package of power quality, security and related service solutions.
Chloride Group PLC is based in London, employs about 2,500 people and reported revenue of 336 million pounds in its fiscal year ended March 31, 2010. Shares in the company are traded on the London Stock Exchange.