ZÜRICH, Switzerland — ABB Ltd (“ABB”) has agreed with Rotork plc (“Rotork”), a well-established global provider of mission-critical intelligent flow control solutions and a leading independent manufacturer of electric actuators, the terms of a recommended cash offer for the entire issued and to be issued share capital of Rotork. The transaction is expected to further strengthen ABB’s focus on electrification and automation and expand its Automation business area’s offering for large and complex infrastructure and industries.
Under the terms of the offer, each Rotork shareholder would be entitled to receive 503 pence in cash per Rotork share, representing a premium of around 60% to Rotork’s latest 3-month average share price. The transaction implies an enterprise value of around $5.5 billion, reflecting an EV/Sales (2025 actual) multiple of around 5.3 as well as an EV/EBITDA (2025 actual) multiple of around 19.5x with the latter reducing towards the ‘mid teens’ level when accounting for anticipated synergies.
Rotork shareholders will also be entitled to receive an interim dividend for the period to June 30, 2026 of up to 3 pence per Rotork share (the “Permitted Dividend”) without any reduction to the offer value.
Compelling strategic fit
Rotork’s business with well-established positions in mission-critical flow control and instrumentation is highly complementary to ABB’s existing automation portfolio and will strengthen ABB’s position at the field-device layer. ABB would benefit from an expanded automation offering, enhancing the “sense-control-act” automation loop with intelligent field devices and software that continuously monitors and manages industrial processes for safer, more productive, and sustainable operations. The mix of ABB’s Automation business would be improved through increased exposure to higher-margin products, services, and lifecycle revenues.
Upon closing, Rotork is expected to operate as a separate division under a strategic growth mandate within ABB’s Automation business area.
“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,” said Morten Wierod, CEO of ABB. “We are convinced of the compelling strategic fit of the transaction that will expand our automation offering at the field device layer generating significant value for customers, employees, and shareholders of both companies. As part of ABB, Rotork is expected to accelerate its growth and value creation while preserving its entrepreneurial spirit and customer proximity that makes this business so successful. With our strong balance sheet ABB has room for additional M&A and execution of its announced share buyback program.”
“The Board believes that the offer from ABB reflects the high quality of Rotork and recognises the significant progress delivered through the successful implementation of our Growth+ strategy, whilst providing an attractive opportunity for Rotork shareholders to accelerate the value creation of the Company’s strong future prospects, in cash at closing,” added Dorothy Thompson, Chair of Rotork. “The combination brings together two companies whose purposes are closely aligned, with a shared focus on automation and electrification to enable more sustainable and efficient operations. The Board also believes that ABB’s decentralised operating model and commitment to run Rotork as a separate division will benefit the Group’s business, employees and wider stakeholders. As a result, the Board has unanimously agreed to recommend the offer to Rotork shareholders.”
Financing of the offer
ABB will finance the transaction through existing cash resources (approximately $5.8 billion cash and marketable securities as of June 30, 2026) as well as committed bank facilities. In addition, the signed divestment of ABB’s Robotics business to SoftBank is expected to deliver approximately $4.8 billion of net cash proceeds at closing targeted for the second half of 2026, further strengthening ABB’s liquidity.
Timing and approvals
The transaction will be implemented by way of a court-sanctioned scheme of arrangement under the U.K. Companies Act 2006. Rotork’s board of directors has unanimously approved the transaction and intends to recommend to its shareholders to vote in favor of the transaction at its upcoming shareholders meeting.
The transaction is expected to close in the first half of 2027 and is subject to Rotork’s shareholder vote and customary regulatory approvals.
Barclays acted as sole financial advisor and Freshfields as legal advisor to ABB.
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