The potential deal is likely to be structured using Reverse Morris Trust – a tax-efficient way that companies typically use to sell of large assets. The potential deal is likely to be announced in the coming days.
As per a report from the Wall Street Journal, Gardner Denver Holdings Inc, an industrial machinery maker, is close to sealing a deal to merge with a division of Ingersoll-Rand Plc. If it is successful in its venture, it would create a business that would have an enterprise value, including debt, of nearly $15 billion.
The potential deal, likely to be announced later this week, would involve a mixture of cash and stock for Ingersoll shareholders, stated WSJ citing sources.
The deal would be structured as a so-called Reverse Morris Trust, a tax-efficient way for companies to sell off a division, and Ingersoll shareholders are expected to own just over half of the new company.
Vicente Reynal, Gardner Denver’s CEO would be leading the merged company, said the WSJ.
Gardner Denver, part-owned by private-equity firm KKR & Co Inc, did not immediately respond to a request for comment.
Ingersoll-Rand declined to comment on the deal.
Incidentally, Ingersoll’s climate segment, which includes its heating, ventilation and air-and temperature-controlled transport businesses, would not be part of this deal.