Ingersoll-Rand to buy Trane for $10.1 bln
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NEW YORK (Reuters) - Diversified manufacturer Ingersoll-Rand Co Ltd said on Monday it would buy Trane Inc , a leading maker of heating and air conditioning systems, for $10.1 billion in cash and stock.The deal values Trane at $47.81 per share, a 28.5 percent premium over its December 14 closing price of $37.20. Ingersoll-Rand will pay $36.50 in cash and 0.23 share of its stock for each Trane share.The combined companies expect to earn $4 per share in 2008, Ingersoll-Rand Chief Executive Herbert Henkel said in a statement.With the acquisition of New Jersey-based Trane, formerly known as American Standard Cos, Ingersoll-Rand said it expects its climate control business to generate $11 billion in revenue in 2008."Based upon market fundamentals such as rising energy costs and conservation initiatives, we expect solid replacement demand for energy-efficient products and for retrofit and refurbishment of current systems," Henkel said.The deal, which has been approved by both companies' boards of directors, is expected to generate $300 million in pre-tax cost and revenue synergies by 2010, the companies said.Ingersoll-Rand, based in Hamilton, Bermuda, will assume $150 million of Trane's net debt.The companies expect the deal to close late in the first quarter of 2008 or early in the second quarter following shareholder and regulatory approval.Shares of Ingersoll-Rand closed at $49.18 on Friday.(Reporting by Emily Chasan and Ilaina Jonas; Editing by Paul Bolding and John Wallace)
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