WOODCLIFF LAKE, NJ, and BRIDGETON, MO — Ingersoll-Rand Co. (IR), a diversified industrial firm, announced that it has signed a definitive agreement to expand its global climate control business by acquiring Hussmann International, Inc., a leading manufacturer of commercial refrigeration products.

IR expects the acquisition to be immediately accretive to earnings per share by two to five cents for the year ending Dec. 31, 2000, and by 15 to 20 cents in 2001, the first full year of combined operations. In addition, the company expects to achieve a return on invested capital of 15% from this transaction by 2004.

The transaction is valued at approximately $1.83 billion, including the assumption of approximately $275 million of debt.

Under terms of the definitive merger agreement, which has been approved by the boards of directors of both companies, IR will pay $29 in cash for each of Hussmann’s approximately 50.6 million common shares, and will redeem all outstanding Hussmann stock options.

J. Larry Vowell, Hussmann International president and ceo, said that “Hussmann’s board of directors has unanimously approved the merger agreement and agreed to recommend the tender offer to Hussmann shareholders.

“By linking our experience and capabilities with IR’s leadership in refrigerated transport solutions, we are confident that we will be able to capitalize on the increasing, global opportunities associated with food infrastructure, distribution, and preservation needs.”

Herbert L. Henkel, IR chairman, president, and ceo, said that “The acquisition of Hussmann International significantly expands IR’s presence in climate control, which is one of our four key global growth sectors.”

He added, “Hussmann’s organic growth rate of 6% to 8% per year is consistent with the revenue growth targets we have established for IR overall through the year 2004. We expect this growth to be driven by several key factors and trends, such as consumer demand for fresh, frozen, and prepared foods and beverages, as well as the consolidation of grocery chains, both of which are causing extensive store remodeling.

“We also are enthusiastic about the opportunity to meet the needs of the emerging e-grocer segment through our combined Thermo King and Hussmann offerings.”

Henkel also said that Hussmann’s international manufacturing assets “provide the capacity to serve the growing European, Asian, and Latin American markets. By sharing these manufacturing facilities on a global scale, we can reduce the need for capital expenditures that would otherwise have been required for the global expansion of our climate control operations.”

He concluded that “On a combined basis, our climate control operations will have revenues of approximately $2.8 billion by 2001. We expect the profitable growth of this business to be enhanced as we realize cumulative operating synergies of more than $100 million by 2003.”

Hussmann International operates 25 manufacturing facilities in nine countries: Australia, Brazil, Canada, China, Mexico, New Zealand, Spain, the United Kingdom, and the United States.