Eaton Corporation ( ETN )
has completed its proposed acquisition of Santiago-based Rolec
Comercial e Industrial S.A. This transaction involves acquisition
of all the shares of the Chilean firm.
COOPER INDS PLC (CBE): Free Stock Analysis
EATON CORP (ETN): Free Stock Analysis Report
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Rolec Comercial e Industrial S.A. engages in manufacture of
integrated power assemblies, and low and medium voltage
switchgears. The company also provides engineering and mining
services, and offers heavy industrial applications. Apart from
Chile, the company has presence in Peru.
Currently, Eaton is on the verge of completion of its acquisition
of Cooper Industries plc ( CBE ).
Few days ago, the company received clearance-approvals related to
this acquisition from the Competition Bureau of Canada, Korean Fair
Trade Commission and the Turkish Competition Authority.
In July 2012, Eaton completed the acquisition of South Korean
company Jeil Hydraulics, a manufacturer of track and swing drive
motors, main control valves and remote control valves. This
transaction is expected to bolster Eaton's presence in the emerging
markets while expanding its product coverage, with respect to its
motor item segment.
As of June 30, 2012, Eaton had cash and short-term investments of
$1.18 billion compared with $1.08 billion as of December 31, 2011.
The company's strong liquidity position enables it to pursue a
steady inorganic growth approach.
It is evident from Eaton's last few acquisitions that the company
is diversifying its portfolio in terms of expansion of its line of
businesses as well as global footprint, particularly in Europe,
Middle-East, Africa, the Asia-Pacific region and now in Latin
America. This acquisition will expand the company's Latin American
operations, further strengthening its existing base in Brazil and
We have observed that Eaton has already experienced positive
impacts associated with strong acquisition strategy in its
second-quarter 2012 results. In the last couple of quarters, the
company sealed some significant deals, which includes acquisition
of E.A. Pedersen Company and IE Power, Inc. On the top of these
acquisitions, the company's sales of the Electrical Americas
segment inched up 1% year over year. This segment also expects to
report a strong performance in the second half of 2012. In
addition, we believe that the decline in cost of goods sold and
lower tax rate will likely benefit the company in the second half
However, we are concerned about volatile currency market condition
and slow economic growth rate in the emerging countries, which
might have a negative impact on Eaton's future results.
Eaton Corporation currently retains a short-term Zacks #3 Rank
Cleveland, Ohio-based Eaton Corporation offers an array of
products, such as powertrain, truck and automotive systems,
electrical components and systems, hydraulics and pneumatic systems
for commercial and military use.