Source: Sharecast
Under the terms of the acquisition announced on Thursday, ABB will pay 506p per share in cash. This comprises 503p and a dividend of up to 3p. This represents a premium of 73% to the closing Rotork share price on Wednesday.
Rotork is expected to operate as a separate division within ABB's Automation business under a strategic growth mandate. ABB said the acquisition would add 3% to group revenue and 12% to the revenues of its Automation business for the financial year ended 31 December 2025.
ABB said Rotork's mission-critical flow control and instrumentation solutions are highly complementary to its automation portfolio, strengthening the company’s position at the field-device layer and enhancing the "sense-control-act" automation loop.
It also said that Rotork would expand ABB's automation offering for large and complex industrial and infrastructure applications, while increasing exposure to “attractive” end markets and improving the mix of ABB's Automation business area through higher-margin products, services and lifecycle revenues.
Rotork chair Dorothy Thompson said: "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 Rotork board believes that ABB's decentralised operating model and commitment to run Rotork as a separate division will benefit the Rotork Group's business, employees and wider stakeholders. As a result, the Rotork board has unanimously agreed to recommend the offer to Rotork shareholders."
At 1040 BST, Rotork shares were up 66.9% at 485.21p.
Broker Shore Capital, which rates Rotork at 'hold' with a 320p price target, said; "The cash consideration implies an enterprise value of £4.1bn (19.5x both trailing and, on our forecast, forward EBITDA, and 5.3x trailing sales).
"We see this valuation as being favourable for Rotork shareholders and we would be surprised if they did not support the takeover. Rotork briefly traded around the 385p level in February 2026 but has otherwise rarely trade above 350p since 2021.
"Rotork has long been well regarded as a high-quality business with strong returns. Uncertainty in the Middle East, which drives circa 10% of group revenue, along with general macroeconomic uncertainty, has weighed on the share price since the end of February, despite the company reporting what we considered to be reassuring updates.
"ABB expects synergies from the acquisition to drive the EBITDA multiple down from 19.5x to the mid-teens level with Rotork being complementary to ABB’s automation profile."
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