Aeroquip-Vickers Inc - Acqn. by Eton Corporation

RNS No 9611t
AEROQUIP-VICKERS, INC.
1st February 1999


 Eaton to Acquire Aeroquip-Vickers for $1.7 Billion
     
 Eaton Corporation (NYSE:ETN) and Aeroquip-Vickers, Inc. (NYSE:ANV) today
jointly announced that Eaton will acquire all of the outstanding
common shares of Aeroquip-Vickers for $58 per share in cash, or
approximately $1.7 billion. The Boards of Directors of both companies
have approved the transaction, which is subject to normal closing
conditions and the approval of Aeroquip-Vickers shareholders. It is
expected to be completed in April.

     Stephen R. Hardis, Eaton Corporation Chairman and Chief Executive
Officer, said, "We are very pleased to welcome Aeroquip-Vickers to the
family of Eaton businesses. Leadership is a fundamental requisite for
success in today's global economy. This acquisition enables Eaton to
achieve that critical objective - building upon and extending Eaton's
strong position in mobile hydraulics. With Vickers, we acquire a
global leader in industrial hydraulics and the combined scale of 
$1.1 billion to serve mobile and industrial customers. This
complementary acquisition fundamentally repositions our business among
the world leaders, just as our 1993 acquisition of the Westinghouse
DCBU did for our Cutler-Hammer business.

     "With Aeroquip, we expand upon these strengths in hydraulics via
its $1.1 billion position in hose and couplings, serving mobile and
industrial, aerospace and automotive customers. Together, Eaton and
Aeroquip-Vickers create an aerospace hydraulics business with sales of
$700 million, and a systems capability across all hydraulics
applications that is unparalleled.

     "The value created for our customers and our owners from this
combination will be significant, with mature-year synergies of about
$120 million. We expect the acquisition to be neutral to Eaton
earnings this year, excluding first-year transition costs, but to add
about $1 per share to annual earnings by years 3 to 5.

     "Eaton now has a very strong family of industrial products and
brand names: Eaton, Cutler-Hammer, Vickers, Aeroquip, and Char-Lynn.
Along with our traditional strengths with OEMs, we now have strong
positions in distributor, aftermarket, and service channels."

     Darryl F. Allen, Aeroquip-Vickers Chairman, President and Chief
Executive Officer, said, "This is a great opportunity for
Aeroquip-Vickers and its operations. Like Aeroquip and Vickers, Eaton
is a leader in many of its product lines. Eaton also recognizes the
well-respected heritage of the Aeroquip and Vickers brands and the
strength of those brands in global markets.

     "Today, many industrial markets are consolidating, including the
hydraulics market. It is clear that to successfully compete, a firm
must supply complete product lines and global platforms. At $2.2
billion, Aeroquip-Vickers is too small to realize the full advantage
of its strengths. Adding Aeroquip-Vickers to Eaton, however, creates
an impressive force. I cannot think of a better company with which to
secure the future of our employees, customers and suppliers."

     Concluded Hardis, "This is the largest acquisition in Eaton's
history. More important, it builds upon and expands the growth
platforms that are redefining Eaton as a premier diversified capital
goods company, distinguished by differentiated products and services.
Given Eaton's strong positive cash flows, we could finance this
acquisition entirely through debt. But, we intend to continue to build
upon all of Eaton's growth platforms, and so we expect to include
about 20% equity to fund this transaction.

     "This acquisition is an important step toward achieving Eaton's
long-held Year 2000 goals of $10 billion in sales and $8 earnings per
share. Far more important, it reinforces our determination to build a
global enterprise characterized by superior operating performance and
higher sustainable growth."

     Eaton Corporation is a global manufacturer of highly engineered
products that serve industrial, vehicle, construction, commercial and
semiconductor markets. Principal products include electrical power
distribution and control equipment, truck drivetrain systems, engine
components, hydraulic products, ion implanters and a wide variety of
controls. Headquartered in Cleveland, the company has 49,500 employees
and 155 manufacturing sites in 25 countries around the world. Sales
for 1998 were $6.6 billion. The Internet address for Eaton is:
http://www.eaton.com/

     Aeroquip-Vickers is two companies, Aeroquip Corporation and
Vickers, Incorporated, world leaders in the design, manufacture and
distribution of engineered components and systems to industrial,
aerospace and automotive markets. Headquartered in Maumee, Ohio, the
company has 15,000 employees and 50 manufacturing and/or assembly
sites in 15 countries around the world. Sales for 1998 were 
$2.15 billion. The Internet address for Aeroquip-Vickers, Inc. is:
http://www.aeroquip-vickers.com.

     The forward-looking statements in this news release should be
used with caution. They are subject to various risks and
uncertainties, many of which are outside the control of the companies.
Important factors which could cause actual results to differ
materially from those in the forward-looking statements include
changes in global economic and financial conditions, labor strikes,
the markets for hydraulics, hose and couplings around the world and
Eaton's ability to successfully implement the integration.

     Note to Editors: Stephen R. Hardis will be available for
interviews on Monday afternoon by telephone.
   
     CONTACT:  Eaton Corporation, Cleveland
               Renald M. Romain, 216/523-4736
                        or
               Aeroquip-Vickers, Inc.
               Rick Rump, 419/867-2292
     
     KEYWORD:  OHIO WISCONSIN
     INDUSTRY KEYWORD:  AUTOMOTIVE AEROSPACE/DEFENSE
     COMPUTERS/ELECTRONICS COMED MERGERS/ACQ
 

END

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