Eaton Corp. (NYSE:ETN) has expanded its Middle East presence with a power generation
joint venture in the United Arab Emirates. The diversified industrial manufacturer, which already provides power distribution systems and truck components in the region, created the JV through an investment in SEG Middle East Power Solutions & Switchboard Manufacture LLC, which makes low-voltage switchboards and control solutions. Terms were not disclosed.
The JV is the first significant expansion news for Eaton since November 2008, when the Cleveland Co. announced it had purchased a building in Shanghai to house its
new Asia-Pacific headquarters. The trickle of deal activity is a change for the normally acquisitive Eaton. The company spent $4.25 billion on acquisitions between 2007 and the first half of 2008.
Since then, with demand for its products slowing, Eaton has focused on cash generation, with some success. While sales were off 20% in the
first quarter of 2009, it reported $107 million in operating cash flow and free cash flow of $59 million. Its set to report second-quarter 2009 earnings on July 20.
- Suzanne Stevens
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