Rotork agrees £5.5 billion takeover by ABB as shares soar on cash offer (ROR)

Rotork (LSE:ROR) shares climbed almost 67% after Swiss engineering and technology group ABB (TG:ABB) reached agreement on a recommended all-cash acquisition of the UK-based flow-control specialist. The offer values Rotork at 503 pence per share, placing an enterprise value of approximately $5.5 billion on the business.

Premium offer values Rotork at $5.5 billion

The agreed offer represents a premium of roughly 60% to Rotork’s average share price over the previous three months. In addition to the cash consideration, shareholders will remain eligible to receive an interim dividend of up to 3 pence per share for the period ending 30 June, with the takeover price remaining unchanged.

The acquisition will be funded using ABB’s existing cash reserves together with committed banking facilities. ABB added that proceeds from the planned sale of its robotics division to SoftBank are expected to further enhance its liquidity position.

ABB targets expansion of its automation business

ABB said the acquisition would strengthen its automation division by adding Rotork’s portfolio of flow-control and instrumentation products, which it believes complement its existing technologies.

The company expects the acquisition to increase group revenue by around 3% while providing an immediate positive contribution to its Operational EBITA margin.

“ABB has followed Rotork over many years, and we admire the execution excellence, engineering quality, and customer trust that Rotork’s teams deliver each day,” chief executive Morten Wierod said in a statement, adding that the company sees a “compelling strategic fit” and expects the deal to expand ABB’s automation offering while accelerating Rotork’s growth.

Board unanimously backs the offer

Rotork Chair Dorothy Thompson said the board believes the proposal reflects the progress achieved under the company’s Growth+ strategy while offering shareholders an attractive opportunity to realise value in cash.

“The board believed the offer recognized the company’s progress under its Growth+ strategy while providing shareholders with an attractive cash opportunity.”

The Rotork board has unanimously recommended that shareholders vote in favour of the transaction.

The acquisition is expected to complete during the first half of 2027, subject to shareholder approval and the receipt of customary regulatory clearances.