ABB Buys Thomas & Betts To Strengthen U.S. Low Voltage Position

Power and technology group ABB Ltd (ABBN.VX) Monday said it had paid $3.9 billion for Thomas & Betts Corp, to increase the Swiss company's exposure to the U.S. low voltage market.

Chief Executive Joe Hogan said the acquisition gives ABB "a great position in a growing U.S. economy and balances our portfolio better across the three geographic regions, Asia, Europe and the Americas too."

For ABB, low voltage products like connectors, conduits and fittings "has primarily been a European and Chinese business with relatively little to no U.S. position," Hogan told a company video.

"We are very strong in Europe, Middle East and Far East and Thomas& Betts is really strong in the U.S. so really together we make each other stronger," Hogan added.

Thomas & Betts, which is based in Memphis, Tennessee, was also attractive because of its distribution channels in the U.S.

The company has a network of 6,000 distributors across the U.S. which will allow ABB to double its addressable market to approximately $24 billion.

"In the U.S. low voltage business it wasn't always the best products that won orders, but distribution channels were the most important," Hogan said.

ABB would sell its products through Thomas & Betts distributors. It also wants to sell Thomas & Betts products through its network in Asia and Europe.

Around 30% of Thomas & Betts sales were in the construction market, with most of it in the commercial property sector which had weathered the U.S. downturn better than residential, Hogan added.

In November, ABB said it was targeting sales growth of 7% to 10% each year over the next five years, a figure which could be increased by 3% to 4% by merger and acquisition activity.

-By John Revill, Dow Jones Newswires; [phone] ; [e-mail]