Ingersoll-Rand Company Limited announced that it has
executed a definitive agreement to acquire Trane Inc., formerly American
Standard Companies Inc., in a transaction valued at approximately $10.1
billion, including transaction fees and the assumption of approximately $150
million of Trane net debt. Trane is a global leader in indoor climate control
systems, services and solutions with expected 2007 revenues of $7.4 billion.
Under the terms of the merger agreement, which has been
approved by the boards of directors of both companies, Ingersoll-Rand will
acquire all outstanding common stock of Trane. Holders of Trane's approximately
200 million common shares will receive a combination of $36.50 in cash and 0.23
Ingersoll-Rand shares of common stock per each Trane share. The total value for
this transaction was $47.81 per Trane share based on the closing price as of
December 14, 2007. The transaction, which is expected to close late in the
first quarter or early in the second quarter of 2008, is subject to approval by
Trane shareholders, regulatory approvals and customary closing conditions.
Herbert L. Henkel, Ingersoll-Rand chairman, president and
chief executive officer, said, "The combination of Ingersoll-Rand and
Trane will create a global, diversified industrial company with projected pro
forma 2008 revenues of $17 billion. The new Ingersoll-Rand portfolio will
include an $11 billion Climate Control business which will offer high value
equipment, systems and services necessary for delivering solutions across the
temperature spectrum for indoor, stationary, and transport applications worldwide.
"As a result of expected revenue and cost synergies, we
are confident that this acquisition will improve Ingersoll-Rand's future
earnings growth potential. We believe the new Ingersoll-Rand will be capable of
sustaining annual organic revenue growth averaging 5-7% and EPS growth
exceeding 15% per year, both in excess of our former growth guidance. In
particular, assuming timely consummation of the proposed acquisition, we
anticipate earnings of $4.00 per share in 2008."
