UTC places $1.0 billion offer for Chubb

United Technologies Corp has made a $1.0 billion offer to purchase Chubb in an all-cash deal that the boards of directors of both companies have unanimously approved.

United Technologies has made a $1.0 billion offer to purchase Chubb, a provider of electronic security and fire protection products and services, in an all-cash deal. The boards of directors of both companies are said to have unanimously approved the deal.

London based Chubb employs approximately 48,000 people and reported 2002 revenue of $2.5 billion (£1.5 billion), with more than one million customers worldwide and market-leading positions in the UK, France, Hong Kong, Canada, and Australia.

The offer price of 75 pence per share is said to represent a premium of 13 percent to Chubb’s closing price of 66.25 pence per share on April 15, the day before Chubb disclosed the start of talks. UTC will also assume Chubb’s net debt, which was $934 million (£566 million) as of April 30, 2003, up from $779 million (£473 million) as of December 31, 2002. Chubb will pay a special interim dividend of one pence per share.

UTC said the transaction is expected to be accretive to earnings, and the company reaffirmed its 2003 outlook for earnings per share in the range of $4.55 to $4.80 and for cash flow from operations, before pension contributions and after capital expenditures, approximately equal to net income.

‘Chubb fits directly into UTC’s business mix and acquisitions strategy,’ said George David, UTC’s Chairman and CEO. ‘The company is a market leader in commercial security services and fire protection, and these businesses have substantial markets. Chubb is further positioned well internationally, and UTC’s already high aftermarket and international revenues will increase following the acquisition.’

UTC’s offer is subject to customary conditions including acceptance of the offer by Chubb shareholders owning at least 90 percent of the shares outstanding, approvals by all relevant regulatory agencies, and compliance with required filing and other regulations.