Rockwell Completes Tender Offer for Reliance Electric

SEAL BEACH —  Rockwell International Corp. said Wednesday it has completed its cash tender offer for Reliance Electric Co., paying $1.03 billion for 63% of the company’s common shares.

Rockwell, based in Seal Beach, said it plans to buy 100% of Reliance, but other steps need to be taken, company officials said. Because part of a second class of Reliance stock with greater voting rights also was tendered, Rockwell now holds 89% of Reliance’s voting stock outstanding.

“We’ve got control of Reliance at this point,” Rockwell spokeswoman Mary Lou Kromer said.

On Nov. 21, Rockwell agreed to pay $1.6 billion in cash to acquire Cleveland-based Reliance, a maker of industrial and telecommunications equipment.

Rockwell’s sweetened offer of $31 a share, up from $30, led Reliance last month to back out of its August agreement to merge with General Signal Corp. in a proposed $1.4-billion stock swap.

Rockwell is a maker of industrial automation systems, automotive components, spacecraft, electronic defense systems, telecommunications and graphics systems. The acquisition of Reliance, with 1993 revenue of $1.6 billion, will boost Rockwell’s annual sales to about $12.6 billion, the company said.

Rockwell will merge Reliance into its rapidly growing Allen-Bradley automation business, making it the company’s single-largest unit, with annual sales of more than $3 billion.

The business will generate about 30% of Rockwell’s sales, company officials said.

The tender offer expired at midnight Tuesday. So far, Rockwell has accepted 33.2 million Reliance shares for purchase, mostly Class A shares but including 146,304 Class B shares, the company said.

The shares give Rockwell 63% of Reliance’s outstanding common stock and 89% of the voting stock, the company said.

Each Reliance share not purchased in the tender offer will be converted into the right to receive $31 in cash for Class A and Class B shares, and $83.948 for each Class C share. No Reliance Class C shares were tendered, Rockwell said.

Rockwell is planning to sell Reliance’s telecommunications operations, whose sales are projected at $470 million for this year. Rockwell said previously that some cutbacks and layoffs are inevitable after the merger.

Reliance adds about 14,000 employees to Rockwell’s 72,000.