ABB Bids for Chloride

ABB Ltd (ABB - Snapshot Report) stepped up the bidding war on Chloride by offering 864 million pounds ($1.3 billion) for the UK- based maker of uninterruptible power supplies. The ABB Group made a cash offer of 325 pence a share, outbidding Emerson Electric Company’s (EMR - Analyst Report) 275 pence offer made in April.

Unlike Emerson’s offer, ABB’s bid was recommended by Chloride’s board. Emerson had made a first, unsuccessful attempt to buy Chloride two years ago, at 270 pence a share. ABB plans to make the acquisition through a scheme of arrangement, requiring the support of 75% of shareholders.

Uninterruptible power supplies are important for the utilities and heavy industry, ABB’s most important customer. However, the increasing reliance on technology makes it critical in other sectors, such as hospitals, airports, data centers and financial institutions. ABB is currently not a leading player in the secure power industry and this transaction would allow Chloride to become the ABB Group’s center for uninterruptible power supplies.

ABB’s offer for Chloride comes just sometime after its agreed $1bn takeover of Ventyx, a US software developer for power grids and other applications, and a similar-sized offer to buy out minorities in its Indian subsidiary.

ABB Ltd provides power and automation technologies for utility and industrial customers worldwide. The company’s Power Products division manufactures and sells high- and medium-voltage switchgears and apparatus, circuit breakers, power and distribution transformers, and sensors.

ABB’s Power Systems division provides systems for grid systems, network management, power generation, and substations. It offers flexible alternating current transmission systems and high-voltage direct current systems; power semiconductor devices; and sub-sea cable solutions and land-cables.

It also provides supervisory control and data acquisition systems; wireless and fixed communication systems; system integration for instrumentation, control, and electrical equipment; water pumping stations; air- and gas-insulated substations; and services and support for managing existing power transmission and distribution assets.

In addition, it undertakes contracts for spare parts management, support agreements, and retrofits; and analyses of the design of new transmission and distribution systems.

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