ABB will acquire Thomas & Betts for $72 per share in cash or approximately $3.9 billion. The acquisition price represents a 24% premium to Thomas & Betts’ closing stock price on Jan. 27, 2012, and a 35% premium to the volume weighted average stock price over the past 60 trading days. The transaction is subject to approval by Thomas & Betts shareholders as well as to customary regulatory approvals, and is expected to close by the middle of 2012.

The complementary combination of Thomas & Betts’ electrical components and ABB’s low-voltage protection, control and measurement products would create a broader low voltage portfolio that can be distributed through Thomas & Betts’ network of more than 6,000 distributor locations and wholesalers in North America, and through ABB’s well established distribution channels in Europe and Asia. The combined product portfolio and enhanced distribution network will enable ABB to double its addressable market in North America to approximately $24 billion.

Thomas & Betts, combined with ABB’s North American low-voltage products business, will become a new global business unit led out of Memphis, Tennessee, under the leadership of Pileggi.

Thomas & Betts employs approximately 9,400 people and is estimated to report 2011 revenues of approximately $2.3 billion and earnings before interest, taxes, depreciation and amortization of approximately $390 million. Its main business is the manufacture of low-voltage and ultralow-voltage electrical products such as connectors, conduits and fittings as well as wiring management products for the construction, industrial and utilities markets. These are complementary to the offering of ABB’s Low Voltage Products division, which includes products such as breakers and switches. In addition, Thomas & Betts has a logistics model with its distributors that allows simple, single invoicing and fast delivery of its full product scope. Thomas & Betts also supplies towers for electrical power transmission and has a business that produces heating, ventilation and air conditioning units, both new to ABB but related to its core power and automation focus.

ABB has secured a $4 billion, fully underwritten bridge financing commitment from Bank of America Merrill Lynch which will be repaid through a combination of cash and the issuance of debt. The transaction is expected to be accretive within the first year after it closes prior to one-time charges and implementation costs. ABB expects the transaction will deliver approximately $200 million in annual synergies by 2016. The majority of cost synergies are expected to come from sourcing and purchasing efficiencies.

“This is a unique opportunity for ABB to grow in the largely untapped North American low-voltage products market,” said Tarak Mehta, Executive Committee member responsible for ABB’s Low Voltage Products division, into which Thomas & Betts will be integrated as a stand-alone unit. “We plan to keep and build on Thomas & Betts’ strong brand and product names. We have complementary products that can be sold together already today and other products that will take some time to introduce to customers.”

“ABB and Thomas & Betts share a common culture. We admire the in-depth industry expertise and enthusiasm of the Thomas & Betts team and their excellent long-term relationship with distributors and wholesalers,” Mehta said. “We will continue Thomas & Betts’ successful business model with its distribution, wholesalers and OEM customers and the Thomas & Betts executive team will lead and drive the successful development of the new business unit.”

Under the terms of the agreement, the transaction is structured as a merger requiring approval of a majority of Thomas & Betts shareholders at a special meeting, which is expected to take place in the second quarter. Closure of the transaction is also conditioned on customary regulatory approvals, including in both North America and Europe.

Bank of America Merrill Lynch acted as financial adviser to ABB and will provide the bridge financing facility and Kirkland & Ellis LLP acted as legal advisor. Deutsche Bank Securities Inc. acted as financial adviser to Thomas & Betts and Davis Polk & Wardwell LLP as legal advisor.