Ingersoll-Rand to buy Trane in cash, stock deal
|
|
|
BOSTON (Reuters) - Diversified manufacturer Ingersoll-Rand Co Ltd said on Monday it would buy Trane Inc , a maker of heating and air conditioning systems, for $9.4 billion in cash and stock.The deal would give Ingersoll a larger position in the cooling business and put the strength of a major conglomerate behind Trane, which faces rivals including United Technologies Corp's Carrier unit. Trane, formerly known as American Standard, earlier this year sold off its bath and kitchen business and spun off its vehicle control units to focus on air conditioning.With the addition of Trane, Ingersoll will have 2008 revenue of about $17 billion, the company said. Analysts' average forecast for Ingersoll's 2008 revenue, without Trane, is $9.35 billion.Based on Monday's share prices, the deal values Trane at $47.10 per share, a 26.6 percent premium over its December 14 closing price of $37.20. Ingersoll will pay $36.50 in cash and 0.23 share of its stock for each Trane share.Ingersoll said Trane had about 200 million shares outstanding. It also said it would assume $150 million of Trane debt.Trane shares rose $8.74, or 23.5 percent, to $45.94 in morning trade on the New York Stock Exchange. Ingersoll shares slipped $3.10, or 6.3 percent, to $46.08, also on the NYSE.The combined companies expect to earn $4 per share in 2008, Ingersoll Chief Executive Herbert Henkel said in a statement.With the acquisition of Piscataway, New Jersey-based Trane, Ingersoll said it expects its climate control business to generate revenue of $11 billion 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, is expected to generate $300 million in pretax cost and revenue synergies by 2010, the companies said."Strategically, the deal is sound," Deutsche Bank analyst Nigel Coe wrote in a note to clients. "(Ingersoll) is one of the world's largest manufacturers of refrigeration and air solutions, although it currently has limited presence in the air conditioning world."Ingersoll is incorporated in Hamilton, Bermuda, but maintains administrative headquarters in New Jersey.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.(Reporting by Scott Malone in Boston and Emily Chasan and Ilaina Jonas in New York; Editing by John Wallace and Dave Zimmerman)
(c) Reuters 2007. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
|
|
|
|
|
|
Related News
Washington Post shutters its remaining bureaus outside US capital
Washington - The Washington Post will close its remaining bureaus outside the US capital, the paper said Wednesday, in an attempt to cut costs in the prevailing economic climate. The daily said it would close bureaus in New York, Chicago and Los Ange...
FDIC: 'Problem' banks at 16-year high in US
Washington - The number of US banks in danger of collapse has risen to the highest level in 16 years, a government regulator reported Tuesday in a sign that the country's worst financial crisis in decades is still lingering. The Federal Deposit Insur...
American shoppers lace up racing shoes for Black Friday
Los Angeles - Up to 134 million Americans are expected to splash out with their cash when the holiday shopping season kicks off on traditional Black Friday. The National Retail Federation Tuesday said it anticipated that the easing recession will sen...
US stocks edge lower on revised growth figures
New York - US stocks fell slightly on Tuesday as government figures showed that last quarter's economic rebound was smaller than initially thought. The Commerce Department in an updated estimate said the economy grew at an annual rate of 2.8 per cent...
US economic rebound smaller than thought; Fed optimistic - Summary
Washington - The US economy's rebound from a deep recession was smaller than initially thought, according to new government figures Tuesday, while the Federal Reserve said it expects the country's recovery to pick up...
EXTRA: US central bank issues rosier outlook on economy
Washington - The Federal Reserve Tuesday raised its growth forecasts for the US economy, but warned that unemployment in the United States will remain for some time at its highest levels in a generation. The US central bank projected the world's larg...
US levies first-ever fines on airlines who stranded passengers
Washington - Three US airlines were fined a total of 175,000 dollars on Tuesday for leaving passengers stranded nearly six hours on an aircraft, the first-ever such penalty imposed by the US government. Continental Airlines and ExpressJet Airlines we...
|
|
|
|
|
|
|
|
