Cooper Industries is a broadly diversified manufacturer of electrical and general industrial products, and energy related machinery and equipment. The company operates in three different business segments with 21 separate profit centers. These segments include electrical and electronic, commercial and industrial, compression, drilling and energy equipment. The product line is consisted of cheap fuses to $3 million compressor tribune sets along with products such as hand tools and light fixtures.
The company bid a $21-a-share tender offer to acquire Champion Spark Plug, manufacturer of auto spark plugs, as a counter offer for the Dana Corp.'s $17.50-a-share bid. Also, in the mean time, Cooper Industries was considering a $700 million bid for Cameron Iron Works. Even though purchasing either or both companies will give operational and organizational advantages, there were high financial risks involved. Undertaking both acquisitions would result in a 55% to 60% debt to capitalization ratio.
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