Diversified engineering company Eaton is to acquire hydraulics specialist Aeroquip-Vickers in a deal worth around $1.7 billion. The transaction is expected to close in April.
Cleveland, Ohio-based Eaton says the acquisition will create an aerospace hydraulics business with sales of $700 million and an "unparalleled" systems capability. The consolidation is expected to produce annual savings of about $120 million, says Eaton chief executive Stephen Hardis.
As recently as December, Aeroquip-Vickers was on the acquisition trail, when its Vickers subsidiary purchased US hydraulic and pneumatic components manufacturer MC Aerospace.
"At $2.2 billion [in annual revenues], Aeroquip-Vickers is too small to realise the full advantage of its strengths," says chief executive Darryl Allen. Eaton had sales of $6.6 billion last year and Hardis says the acquisition boosts the company towards its goal of achieving $10 billion in sales by 2000.
Source: Flight International