(Adds acquisition history starting in the third paragraph.)
Jan. 29 (Bloomberg) -- ABB Ltd., the world’s largest provider of power-transmission gear, is nearing an agreement to buy Thomas & Betts Corp., a maker of electrical connectors, for about $4 billion, a person with knowledge of the plan said.
ABB, based in Zurich, may announce a deal as soon as tomorrow, said the person, who spoke on condition of anonymity because the negotiations are private. The talks may still break down for Thomas & Betts, whose market value was $3.02 billion based on its Jan. 27 closing price of $57.95 a share.
Thomas & Betts, based in Memphis, Tennessee, would be ABB’s second large acquisition under Chief Executive Officer Joe Hogan, who joined in 2008 from General Electric Co. He bolstered ABB in the U.S. with the January 2011 purchase of Baldor Electric Co. for about $3.1 billion. That deal added industrial motors and drives and gave ABB heft in automation, where it competes with Siemens AG.
Spokespeople for ABB in Zurich didn’t immediately respond to messages seeking comment. A phone message at the office of Tricia Bergeron, an investor relations representative for Thomas & Betts, wasn’t immediately answered. The Wall Street Journal reported the talks earlier today, citing unidentified people familiar with the situation.
ABB and Munich-based Siemens compete in areas such as factory automation gear and power-transmission equipment. ABB, which posts fourth-quarter earnings Feb. 16, had revenue of about $32 billion in 2010, with power products making up about 27 percent of sales.
Hogan Builds ABB
Hogan has vowed to pursue “disciplined” acquisition opportunities across all business areas and geographies, and he has proven that he is willing to abandon a deal. In 2010, he walked away from a planned purchase of Chloride Group Ltd. after being outbid for the U.K. company by Emerson Electric Co.
ABB has said purchases may boost annual sales growth by as much as 4 percent until 2015.
Thomas & Betts was founded in 1898 as a sales agency for electrical wires and raceways, and its products are used in the telecommunications, construction and power utility industries. The shares of the company, whose 2010 sales were $2 billion, have gained 13 percent in a year.
Thomas & Betts reported on Oct. 20 that third-quarter profit from continuing operations rose 32 percent to $54.3 million, or $1.03 a diluted share.
--With reporting by Benedikt Kammel in Berlin. Editors: Kevin Miller, Sylvia Wier
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