Cooper Industries

The Cooper company was founded in 1833 and is known as the leading supplier of the electrotechnical equipment. In its portfolio a broad spectrum of electrotechnical products, including the systems of an electrical protection, transfer and distribution of energy and also lighting and erection facilities. The products Cooper allow clients to increase energy efficiency and security on the different serviced sales markets.

After closing of the transaction which is expected in the second half of 2012 Eaton and Cooper will become a part of the new company registered in Ireland where now the Cooper company is registered. The new company which, presumably, will be called Eaton Global Corporation Plc or New Eaton will be headed by Alexander M. Katler (Alexander M. Cutler), holding now a position of the chairman of the board of directors and chief executive officer of Eaton.

Revenue of the united company can make record 21.5 billion US dollars, as in 2011, and a profit before taxes, percent, wear and depreciation (EBITDA) – 3.1 billion US dollars.

The expected benefit for shareholders will be reached for the account:

• Profitable use of an expanded product line of the electrotechnical Eaton and Cooper directions,
• Accelerations of rates of long-term growth due to expansion of services industry and presence on perspective sales markets,
• Opportunities more quickly and qualitatively to respond to the requests of clients in the field of energy efficient and safe electrotechnical technologies,
• Generation of an additional joint cash flow in the amount of 535 million US dollars by 2016.

It is expected that Acquisition will increase operating profit by an action for 0.35 US dollars by 2014 and for 0.45 US dollars by 2015. Except for the non-monetary expenses connected with depreciation of non-material values in connection with purchase accounting it is expected that acquisition will increase operating profit by an action for 0.65 US dollars by 2014 and 0.75 US dollars by 2015. Acquisition will be partially financed by cash, the credits and actions.

Under the terms of the agreement between two companies, shareholders of Cooper will receive 39.15 US dollars in cash and 0.77479 stocks Eaton for each action which is available for them. Thus, proceeding from Eaton share value on closing of biddings on Friday, May 18, 2012, shareholders of Cooper will receive shares worth 72 US dollars everyone that is equivalent to 29% of the preferred share. Total amount of the transaction is about $11.8 billion. Shareholders of Eaton will receive one share of the new company for one stock Eaton which they own at the time of closing. Transaction will be assessed with a tax, proceeding from the US federal income tax, both for shareholders of Eaton, and for shareholders of Cooper.

It is supposed that shareholders of Eaton will possess about 73% of the united company, and to shareholders of Cooper about 27%. The stocks New Eaton will be registered in the U.S. Securities and Exchange Commission, is planned that they will be on sale at the New York Stock Exchange under the exchange character – ETN.

For financing of the transaction Eaton received a credit line in the amount of 6.75 billion US dollars from Morgan Stanley Bank, N.A., Morgan Stanley Senior Funding, Inc. and Citibank, N.A. Means will be used for payment of a cash part of the transaction. In further Eaton is going to refinance this debt using a new loan, attraction of cash or a possible asset sale.