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 PITTSBURGH, Aug. 11 /PRNewswire/ -- The Eaton Corporation (NYSE: ETN) today announced it has agreed to purchase the distribution and control business unit from Westinghouse Electric Corporation (NYSE: WX).
 Eaton Chairman William E. Butler said the definitive agreement calls for a purchase price of $1.1 billion plus the assumption of certain liabilities.
 The sale is subject to approval by the government and to the waiver by Siemens A.G. of Germany of a right of first refusal contained in a 1988 contract under which Westinghouse supplies circuit breakers to Siemens for the European market. Eaton has a right to terminate the agreement if the waiver by Siemens is not obtained within 30 days. Based on discussions with Siemens during the sale process, Westinghouse said it believes Siemens should be in a position to make a prompt decision.
 Westinghouse Chairman Michael H. Jordan said the sale represents another major step in providing funds to retire debt from its financial services' unit losses.
 Butler said the Westinghouse unit would be combined with Eaton's industrial control and power distribution operations which manufacture and sell products under the Cutler-Hammer brand. The combination of the two operations will create a control and distribution business with $1.6 billion in sales, increasing Eaton's total sales by 25 percent.
 The Eaton chairman said: "The purchase of the Westinghouse unit presents an extraordinary opportunity to create added value by combining two highly complementary businesses.
 "This is another important step in achieving our goal of profitable growth in all of our major lines of business," Butler said.
 The Eaton Corporation employs 38,000 people in 20 countries and had sales of $3.8 billion last year. The company is a manufacturer of highly engineered products for the automotive, industrial, commercial and military markets. Principal products include truck transmissions and axles, engine components, electrical equipment and controls.
 The Westinghouse distribution and control business unit employs 12,500 people at 36 plants and facilities in the United States, Puerto Rico, Canada, Brazil, United Kingdom, Venezuela, Dominican Republic, and Mexico. It also has 27 satellite operations and 12 distribution centers. The sale to Eaton includes the Challenger Electrical Equipment Corp. acquired by Westinghouse in 1987. The transaction will not include Email Westinghouse Pty. Ltd., an Australian joint venture which manufactures distribution and control products.
 "This divestiture following the recently announced sales of more than $2 billion worth of financial services' unit assets is another significant stride in the restructuring plan to rebuild shareholder value announced last November," Jordan said.
 "This agreement is strong evidence that we are expeditiously achieving the goals set forth in our plan. We believe we received a good price -- one that serves the interests of both the buyer and the seller," Jordan said.
 "We are pleased too that our employees have an opportunity to go to work for a great corporation like Eaton," the Westinghouse executive said.
 Eaton said it planned to offer employment to substantially all of the affected Westinghouse employees.
 "We believe there is an exceptional match between Eaton's strengths in the industrial controls market and Westinghouse's leadership in the power distribution equipment market that will result in business efficiencies and added value for shareholders and customers," Butler said.
 Eaton said funds for the acquisition will initially come from new bank financing led by J.P. Morgan. Butler said the company's strong cash flow, reinforced by projected results of the expanded electrical components business will enable the company to repay a significant portion of the new debt in the next five years. The company said it will also strengthen its balance sheet through the sale of new equity.
 Westinghouse announced plans in November to refocus on five businesses for future growth, liquidate its financial services business, cut debt by more than $5 billion within two years and streamline its organization. The divestiture of four operating units, including the distribution and control business unit, was a principal part of the plan.
 -0- 8/11/93
 /CONTACT: James P. Schmitt of Westinghouse Electric, 412-642-4642/

CO: Eaton Corporation; Westinghouse Electric Corporation; Siemens A.G. ST: Pennsylvania IN: CPR SU: TNM

KC -- PG003 -- 1500 08/11/93 08:19 EDT
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Publication:PR Newswire
Date:Aug 11, 1993

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