Eaton Corp announced on Thursday its intention of purchasing two companies in Europe and Asia in order to expand its electrical systems business out of the country.

The diversified industrial manufacturer made an offer of 1.55 billion euros ($2.23 billion) to acquire the German electrical components manufacturer The Moeller Group. The corporation also initiated a tender offer of NT$50 per share ($1.54 per share), which makes the net purchase price $565 million, for Taiwan-based Phoenixtec Power Co Ltd, a uninterruptible power supply systems producer.

Phoenixtec announced it already agreed to tender 25 percent of the company's shares to Eaton, which anticipates that the agreement will add 25 to 35 cents per share to operating earnings in 2009.
The Moeller Group is currently owned by UK-based buyout firm Doughty Hanson, a private equity which acquired the majority stake at Moeller in September 2005. The British firma said it will realize income on its equity investment of three times.

The two companies Eaton plans to acquire have combined estimated sales of $2 billion in 2007. Eaton’s management added that the distribution networks and manufacturing facilities of the two companies will help increase Eaton's competitive position overseas.

With this deal closed, Eaton forecasted that its electrical business will have annual returns exceeding $7.5 billion, whit most of those earning coming from international business

Eaton predicted that the 2008 revenue will grow by 25 percent overall and the operating earnings per share will grow by 15 to 20 percent.