In what would be the largest industrial acquisition since 1999, Ingersoll-Rand has agreed to buy Trane for $10.1 billion, creating the second-largest manufacturer of air conditioners and climate-control systems in the world, the Wall Street Journal reports. The deal requires regulatory and shareholder approval but little borrowing, because I-R recently sold assets for $6.2 billion.
The firms have combined revenues of $17 billion and earnings in excess of $2 billion. The transaction reflects the new reality in the deal-making world: As private-equity firms struggle to regain credit-worthiness, a company that would have been an obvious target for a leveraged buyout goes instead to a cash-rich corporation not dependent on the debt markets. (Read more mergers and acquisitions stories.)