SHENZHEN: The new acquisitions of US-based diversified industrial manufacturer Eaton Corp in Europe and Asia will offset the negative market situation in North America to bring a higher growth, the company executives said yesterday in this southern city.

Eaton, which operates out of Cleveland, announced it has completed the purchase of Moeller Group, a German electrical components manufacturer, and Phoenixtec Power Co, a Taiwan uninterruptible power supply (UPS) systems producer, for a combined $2.8 billion.

The two deals were completed this month and in February, respectively.

The two firms booked combined estimated sales of $2 billion in 2007.

"We have seen a slower market in North American in 2007. But we still achieved an 8 percent growth in our electrical business, and we expected an increase of 20 percent over 2007 this year thanks to our increasing exposure to Asia and Europe," said James W McGill, vice president of Eaton operations in Asia and Pacific areas.

He said the company hopes that its overall revenue will be more than $16 billion this year, and that its Asian business will double.

It earlier forecasted that with the acquisition deals closed, its electrical business will have annual returns exceeding $7.5 billion, with most of that coming from international business, which has already accounted for 55 to 60 percent.

Taiwan-listed Phoenixtec, which manufactures and supplies single- and three-phase UPS systems to the global markets, has taken the No 1 market shares on the mainland and in Taiwan province. It has six factories in Shenzhen and Taiwan.

Phoenixtec CEO S C Cheng said Eaton recognizes his company's presence in Taiwan and on the mainland. "The acquisition has enhanced Eaton's overall competition to be the world's second-largest supplier of UPS systems," Cheng said.

He said the acquisition will enrich Phoenixtec's product mixes, optimize the costs and further increase its shares in mainland markets.

McGill said: "Phoenixtec will provide us with an important manufacturing, research and development base for quality equipment and systems in China".

Eaton's sales totaled $13 billion last year from businesses related to electrical systems and components for power quality, distribution and control, fluid power systems and mobile and aircraft equipment.

(HK Edition 04/10/2008 page2)