Rotork backs £4.1bn bid from Swiss rival ABB

Rotork PLC (LSE:ROR) has agreed to a £4.1 billion takeover by Swiss engineering group ABB, in the latest high-profile acquisition of a FTSE 350 company.

The industrial equipment maker recommended the 506p-a-share cash offer, which represents a 73% premium to yesterday's closing share price and a 63% premium to the average price over the past three months.

The transaction adds another London-listed business to the growing list of UK companies being acquired, amid continued interest from overseas buyers attracted by relatively low valuations.

ABB said Rotork's electric actuators and flow control products would strengthen its industrial automation business, while giving it greater exposure to higher-margin service revenues.

Rotork will operate as a separate division within ABB's automation business if the deal completes.

Rotork chair Dorothy Thompson said: "The Rotork board believes that the offer from ABB reflects the high quality of Rotork and recognises the significant progress delivered through the successful implementation of our Growth+ strategy, whilst providing an attractive opportunity for Rotork shareholders to accelerate the value creation of the company's strong future prospects, in cash at closing."

ABB chief executive Morten Wierod said: "We are convinced of the compelling strategic fit of the transaction that will expand our automation offering at the field device layer generating significant value for customers, employees, and shareholders of both companies."

The offer is unanimously backed by Rotork's board, although the only disclosed irrevocable undertakings are from directors, representing about 0.017% of the shares.