Eaton to Acquire a 50 Percent Stake in HuanYu High Tech

Rhea-AI Summary

Power management company Eaton (NYSE:ETN) has agreed to acquire a 50% stake in HuanYu High Tech, a manufacturer of low-voltage circuit breakers and contactors in China, for an undisclosed value. HuanYu High Tech reported sales of $106 million in 2019 and operates in Wenzhou, China. The strategic partnership aims to leverage HuanYu's product portfolio and manufacturing capabilities alongside Eaton's global scale, enhancing their presence in the Southeast Asian market. The transaction is pending regulatory approvals and is expected to close in Q2 2021.

Positive

• Strategic acquisition of HuanYu High Tech enhances market presence in Asia-Pacific.
• Access to HuanYu's strong product portfolio and manufacturing capabilities.
• Potential revenue growth from expanded business opportunities.

Negative

• None.

Power management company Eaton (NYSE:ETN) today announced it has signed an agreement to acquire a 50 percent stake in HuanYu High Tech, a subsidiary of HuanYu Group that manufactures and markets low-voltage circuit breakers and contactors in China, and throughout the Asia-Pacific region. HuanYu High Tech had 2019 sales of $106 million and has production operations in Wenzhou, China.

“We are very pleased to establish this partnership with HuanYu Group,” said Howard Liu, president, Asia-Pacific Region, Electrical Sector and Corporate China, Eaton. “HuanYu High Tech’s strong product portfolio and manufacturing capabilities, combined with Eaton’s global scale and access to the broader Southeast Asian market, opens up many exciting opportunities for us to grow our business in Asia.”

The transaction, which is subject to regulatory approvals and customary closing conditions, is expected to close in the second quarter of 2021.

HuanYu Group is a leading Chinese electrical equipment manufacturer. Founded in 1989 and headquartered in Wenzhou, China, its products are widely used across a variety of industries, including power grid, new energy, communication technology, chemicals, metal smelting, industrial manufacturing, medical and pharmaceutical, transportation, and commercial building.

Eaton’s mission is to improve the quality of life and the environment through the use of power management technologies and services. We provide sustainable solutions that help our customers effectively manage electrical, hydraulic, and mechanical power – more safely, more efficiently, and more reliably. Eaton’s 2019 revenues were $21.4 billion, and we sell products to customers in more than 175 countries. We have approximately 92,000 employees. For more information, visit Eaton.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201215005555/en/

FAQ

What does Eaton's acquisition of HuanYu High Tech involve?

Eaton has signed an agreement to acquire a 50% stake in HuanYu High Tech, a manufacturer of low-voltage circuit breakers in China.

How much did HuanYu High Tech earn in sales in 2019?

HuanYu High Tech had sales of $106 million in 2019.

When is the Eaton and HuanYu transaction expected to close?

The transaction is expected to close in the second quarter of 2021, pending regulatory approvals.

What strategic benefits does Eaton expect from this acquisition?

Eaton aims to enhance its market presence in Asia-Pacific and leverage HuanYu's product offerings and manufacturing strengths.