Courtesy of Eaton

Cleveland, Ohio, USA and Dublin, Ireland – May 21, 2012

Eaton to Acquire Cooper Industries to Form Premier Global Power Management Company

• Complementary Products and Markets Create Opportunities for Growth in Global Electrical Industry

• Cooper Shareholders to Receive $39.15 per Share in Cash and 0.77479 in Ordinary Shares for 29% Premium; Transaction Equity Value of $11.8 Billion

• Transaction Expected to be Accretive to EPS in 2014

Diversified industrial manufacturer Eaton Corporation (NYSE: ETN) (“Eaton”) and electrical equipment supplier Cooper Industries plc (NYSE: CBE) (“Cooper”) today announced they have entered into a definitive agreement under which Eaton will acquire Cooper in a transaction that will significantly increase the capabilities and geographic breadth of the combined company’s power management portfolio and electrical business.

Courtesy of Eaton

Founded in 1833, Cooper is a leading supplier of electrical equipment with a wide range of electrical products including electrical protection, power transmission and distribution, lighting and wiring components.

This suite of electrical products enhances customer energy efficiency and safety across a number of end markets globally.

Courtesy of Eaton

Founded in 1911, Eaton is a global power management company. Its electrical business is a global leader in power distribution, power quality, control and automation, power monitoring, and energy management products and services.

Courtesy of Eaton

Eaton is positioned to answer today’s most critical power management challenges through its electrical, aerospace, hydraulics and vehicle businesses.

Courtesy of Eaton

At the close of the transaction, which is expected in the second half of 2012, Eaton and Cooper will be combined under a new company incorporated in Ireland, where Cooper is incorporated today.

Courtesy of Eaton

The newly created company, which is expected to be called Eaton Global Corporation Plc or a variant thereof (“New Eaton”), will be led by Alexander M. Cutler, Eaton’s current chairman and chief executive officer.

Alexander M. Cutler, Chairman and Chief Executive Officer of Eaton Corporation. Courtesy of Eaton

“This compelling combination of Eaton’s power distribution and power quality equipment and systems with Cooper’s diversified component brands, global reach and international distribution creates a game changer to serve the electrical industry,” said Cutler.
“We’re excited about bringing together two great companies to create shareholder value and continue our global growth. This combination significantly expands our ability to better serve our customers with their demands for critical energy saving technologies as they address the impact of the world’s growing energy needs.”

Kirk Hachigian, Chairman and Chief Executive Officer of Cooper Industries. Courtesy of Cooper

“We are extremely pleased to become part of Eaton’s global electrical business,” said Kirk Hachigian, chairman and chief executive officer of Cooper.
“This combination creates endless opportunities to accelerate growth and serve our global customers through combining technology, distribution, penetrating important vertical industries and entering new emerging markets. The two companies are a perfect fit in every respect.”

Courtesy of Eaton

The combined company would have had historical 2011 revenues of $21.5 billion and EBITDA of $3.1 billion, and it is expected to enhance shareholder value by:

• Leveraging complementary product offerings between Eaton and Cooper’s electrical businesses.

• Accelerating long-term growth potential by increasing exposure to attractive end markets and service opportunities.

• Better satisfying customer global demands for energy efficiency and electrical safety.

• Generating approximately $535 million in expected annual synergies by 2016 .

The Acquisition is expected to be accretive to operating earnings per share by $0.35 in 2014 and by $0.45 in 2015.

Courtesy of Eaton

Excluding the non-cash expense related to the amortization of intangibles arising from purchase accounting, the Acquisition is expected to be accretive to operating earnings per share by $0.65 in 2014 and by $0.75 in 2015 .

Courtesy of Eaton

The Acquisition will be financed with a mixture of cash, debt, and equity.

Under the terms of the Transaction Agreement, Cooper Shareholders will receive $39.15 in cash and 0.77479 shares of New Eaton for each Cooper share. Based on the Closing Price for Eaton common stock on Friday May 18, 2012, Cooper Shareholders will receive cash and shares valued at $72.00 per share, representing a premium of 29 percent and a total transaction equity value of approximately $11.8 billion.

Courtesy of Eaton

Eaton Shareholders will receive one share of the new company for each share of Eaton that they own upon closing.

The transaction will be taxable, for U.S. federal income tax purposes, to both the Eaton Shareholders and the Cooper Shareholders.

Courtesy of Eaton

Eaton Shareholders are expected to own approximately 73 percent of the combined company while legacy Cooper Shareholders are expected to own approximately 27 percent.

Shares of New Eaton will be registered with the U.S. SEC and are expected to trade on the New York Stock Exchange under the ticker symbol ETN.

Courtesy of Eaton

Eaton has secured a $6.75 billion fully underwritten bridge financing commitment from Morgan Stanley Bank, N.A., Morgan Stanley Senior Funding, Inc. and Citibank, N.A. to finance the cash portion of the Acquisition.

Courtesy of Eaton

Eaton plans to later refinance these bridge borrowings through a new term debt issuance, use of cash on hand, and the possible sale of assets.

Any response in relation to the Acquisition should be made only on the basis of the information contained in the Proxy Statement or any document by which the Acquisition and the Scheme are made.

Courtesy of Eaton

Eaton Shareholders and Cooper Shareholders are advised to read carefully the formal documentation in relation to the proposed transaction once the Proxy Statement has been dispatched.

Courtesy of Eaton

This announcement will be available to Eaton employees on Eaton’s website www.eaton.com  

and Cooper employees on Cooper’s website
www.cooperindustries.com  


For more information:

Eaton

Gary Klasen
Eaton media relations
+ 1 (216) 523-4736

Don Bullock
Eaton investor relations
+ 1 (216) 523-5127

Cooper

David Barta,
Senior Vice President and Chief Financial Officer
+ 1 (713) 209-8478


About Eaton


Eaton is a diversified power management company with more than 100 years of experience providing energy-efficient solutions that help our customers effectively manage electrical, hydraulic and mechanical power.

With 2011 revenues of $16.0 billion, Eaton is a global technology leader in electrical components, systems and services for power quality, distribution and control; hydraulics components, systems and services for industrial and mobile equipment; aerospace fuel, hydraulics and pneumatic systems for commercial and military use; and truck and automotive drive train and powertrain systems for performance, fuel economy and safety.

Eaton has approximately 72,000 employees and sells products to customers in more than 150 countries.


About Cooper


Cooper is a diversified global manufacturer of electrical components and tools, with 2011 revenues of $5.4 billion.

Founded in 1833, Cooper’s sustained success is attributable to a constant focus on innovation and evolving business practices, while maintaining the highest ethical standards and meeting customer needs.

Cooper has seven operating divisions with leading positions and world-class products and brands including Bussmann electrical and electronic fuses; Crouse-Hinds and CEAG explosion-proof electrical equipment; Halo and Metalux lighting fixtures; and Kyle and McGraw-Edison power systems products.

With this broad range of products, Cooper is uniquely positioned for several long term growth trends including the global infrastructure build out, the need to improve the reliability and productivity of the electric grid, the demand for higher energy-efficient products and the need for improved electrical safety.

In 2011, 62% of total sales were to customers in the industrial and utility end-markets and 40% of total sales were to customers outside the United States.

Cooper has manufacturing facilities in 23 countries as of 2011.


Source: Eaton Corporation

http://www.eaton.com/Eaton/index.htm  



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