The deal values Cooper at $72 a share. Eaton will pay $39.15 in cash and issue 0.77479 of its own shares for each Cooper share. That means Eaton will pay a 29% premium to acquire the electrical products manufacturer, according to Reuters.
Cooper shares shot up more than 25% on Monday, breaking above $70 a share, while Eaton shares rose fractionally.
The company said the acquisition of Cooper would boost its bottom line by 35 cents a share in 2014 and 45 cents the year after that. It would also cut costs by $535 million a year within four years.
Current Eaton Chairman and CEO Alexander Cutler will head the new company. Eaton shareholders will own roughly 73% of the combined company.