£997m bid moves Chloride closer to American hands

Emerson Electric's two-year pursuit of Chloride appeared near to

success after its bid rival, engineering firm ABB, decided not to increase its offer.

Chloride, which provides blue-chip companies with systems to protect against power outages, was a well-known battery manufacturer but has been a secure power solutions firm since 2000. It employs 2,300 people in 15 countries, of which 374 are located in the UK.

It rebuffed Emerson in May 2008 but the Missouri-based firm returned with another approach worth 723m in April of this year.

This was also rejected by the Chloride board, which later accepted an offer worth 864m from Zurich-based engineering firm ABB.

However, Emerson returned this week with what now appears to be a knock-out bid valuing the company at 997m.

Chloride said ABB's decision not to raise its offer meant it would enter into discussions with Emerson Electric.

Unlike ABB, Emerson is already a major player in the market for uninterruptible power supply (UPS) systems.

The US firm, which employs 130,000 people, expects that Chloride will form the basis of its European UPS growth strategy, although it said this week that its higher price meant it could no longer be certain that a combination will result in a net addition of skilled jobs in the UK.

Chairman David Farr said this week: "The geographic reach and offerings of Emerson and Chloride are highly complementary and highlight the stra-tegic importance of the transaction."

Chloride was first established over 100 years ago and enjoyed a lengthy period as a successful battery manufacturer.

An acquisition by Emerson would result in Chloride following Cadbury and Tate & Lyle's European sugar operations into US ownership.