Eaton to Buy Aeroquip-Vickers for $1.7 Billion

Eaton Corp., an industrial powerhouse that makes systems and components for myriad industries, said it has agreed to buy Aeroquip-Vickers Inc., an aerospace and auto components maker, for $1.7 billion, or $58 a share, in cash. The acquisition would make Eaton’s hydraulics business the world’s second-largest, behind Parker-Hannifin Corp. Cleveland-based Eaton said it plans to issue stock later this year to generate about $400 million to help finance the acquisition. Aeroquip-Vickers’ devices to control machinery--hydraulic pumps, electric motors and electronic controls--would give Eaton a range of products to serve industrial customers who seek diversity from vendors. Shares of Maumee, Ohio-based Aeroquip-Vickers soared $20.75 to close at $56 and Eaton fell $2.81 to close at $66.81, both on the New York Stock Exchange.