Emerson wins Chloride fight as ABB retires
Chloride is to start talks with Emerson Electric after rival suitor ABB pulled out in the face of an improved £997m offer from the US group.
Emerson Electric raised its cash offer on Tuesday by more than a third to 375p a share, seeking to tempt the British maker of uninterruptible power supplies (UPS) away from an agreed £860m deal with Swiss ABB.
ABB said yesterday it would walk away from Chloride, whose products protect against power outages at data centres, airports and hospitals. Some ABB investors had expected an increased bid.
“While we still see considerable value in the combination of ABB and Chloride and have a high regard for the Chloride management team, we must take a disciplined approach when assessing potential acquisitions,” ABB chief executive Joe Hogan said. Chloride said it would now enter talks with Emerson.
On Tuesday, Chloride said Emerson’s sweetened offer represented a superior proposal and, under the terms of an agreement previously signed with ABB, it had formally given the Swiss group two days to match or better the 375p offer.
Further offers for Chloride were seen as unlikely, drawing a close to the bidding war. “I can’t believe someone will come into the frame now,” said Steve Medlicott at Altium Securities. “The price from Emerson was a good price and it reflected cost reductions which ABB could not match.”
The departure of Chloride’s white knight ABB is a victory – albeit at $500m more than he originally offered to pay – for Emerson chief executive David Farr .
Late last year, Farr said Emerson was seeking to bolster its presence in emerging markets as the US government was harming US manufacturers and wasting money on bailouts.