ABB agrees £860m deal for Chloride Group
Deal could spark a bidding war after Chloride shares surge
Swiss engineering firm ABB has negotiated the £860 million
acquisition of UK-based Chloride Group.
Following the announcement, shares in Chloride rose 18 per cent
above the agreed 325 pence per share offer, which may prompt a
counter bid from Emerson Electronic.
Chloride, the back-up power equipment providers, rejected a £723
million takeover from Emerson in April, when share prices were 56
per cent lower than their present levels.
Zuercher Kantonalbank analyst Richard Frei expressed his belief
that the move would be a success.
He said: "Strategically it's certainly sensible. On the one hand
it fits well into the product portfolio, on the other it fits well
with the client base they have and opens new possibilities for
gaining new clients."
Mr Frei claimed Emerson may make an improved bid, but the price
may have escalated to such an extent that they can no longer
compete with ABB.
The Swiss firm currently has around $7.1 billion (£5 billion) in
cash reserves and has recently agreed to buy Ventyx, a US software
maker, for more than $1 billion.