Eaton Buys MGE Small Systems Unit

Eaton Corporation has acquired the MGE small systems business unit from Schneider Electric for about $612 million. The unit, known as MGE Office Protection Systems, is based in Montbonnot, France and sells UPS and surge suppression products in 60 countries. Eaton is best known for its PowerWare UPS systems and Cutler-Hammer surge protection devices.

The deal was driven by Schneider's acquisition of American Power Conversion (APC), which closed early this year. Schneider merged APC with its MGE UPS Systems business, which it acquired in 2003. The European Union cleared the Schneider-APC deal on the condition that Schneider divest its MGE operations for small UPS systems (less than 20kVA). MGE's large capacity UPS business became part of APC-MGE.

"This acquisition enhances our position in the power quality business by increasing scale and geographic scope in key areas including Europe," said Tom Gross, vice president and president, Power Quality and Control Operations of Eaton's Electrical Group. "We will build on MGE Office Protection Systems' impressive track record of relationships in distribution channels and increase our global manufacturing capabilities in Asia."

Eaton's purchase of MGE Office Protection Systems creates an unusual situation, as both Eaton and Schneider/APC will now be selling products under the MGE brand. Eaton says it will continue to use the MGE and PowerWare brands for its UPS products.

MGE Office Protection Systems consists of single-phase UPS and surge suppression products. It is one of the largest suppliers of uninterruptible power supplies in Europe and has significant presence in the Asia/Pacific, African, Latin American, Russian and North American markets. MGE OPS employs 800 people worldwide, with offices in 40 countries.

Eaton Corporation is a diversified industrial manufacturer with 2006 sales of $12.4 billion. Eaton has 63,000 employees and sells products to customers in more than 140 countries.