Diversified industrial firm Ingersoll-Rand Co Ltd announced on Monday that it had reached an agreement to purchase Trane Inc TT.N, a manufacturer of indoor heating and air conditioning systems. The two companies agreed on a purchase sum of about $10.1 billion in cash and stock.

Through this acquirement, Ingersoll-Rand, a global provider of products, services, and integrated solutions to industries as diverse as transportation, manufacturing, construction, and agriculture, follows its latest strategy to expand its climate control business.

According to the terms of the agreement, Ingersoll will pay approximately $47.81 per share for Trane, with $36.50 per share to be paid in cash and the remainder to be paid in 0.23 share of Ingersoll-Rand stock.

"The combination of Ingersoll Rand and Trane will create a global, diversified industrial company with projected pro forma 2008 revenues of $17 billion," said Ingersoll-Rand Chairman, President and CEO Herbert Henkel.

"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," he added.

Ingersoll-Rand chief executive Herbert Henkel said in the statement he has made that a forecast for the next year has already been made and it showed that the two merged companies will earn about $4 per share

The agreement has received the o.k. of both companies’ boards of directors and it’s expected produce $300 million in pre-tax cost and revenue synergies by 2010.

Ingersoll-Rand estimates that its joint climate control operations will turn out revenues of about $11 billion in 2008.

With the agreement, Ingersoll-Rand has also assumed about $150 million of Trane's net debt. The deal is most likely to close in the first quarter of 2008 or early in the second quarter after shareholder and regulatory approval.

Trane shares closed at $37.20 on the New York Stock Exchange on Friday, while shares of Ingersoll-Rand closed at $49.18.