Eaton is a leading power management firm with presence across diverse sectors while Cooper is into supplying electrical equipment and has a wide range of products.
Both companies have presence in India.
Noting that the "transaction equity value" is USD 11.8 billion, Eaton in a statement today said, "complementary products and markets create opportunities for growth in global electrical industry".
As part of the deal, Cooper shareholders would get USD 39.15 per share in cash and 0.77479 in ordinary shares.
The deal would boost the combined entity's power management portfolio and electrical business worldwide. The transaction is expected to be completed in the second half of 2012.
"Eaton and Cooper will be combined under a new company incorporated in Ireland, where Cooper is incorporated today," the statement said.
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The new entity would be led by Eaton Chairman and CEO Alexander M Cutler.
Eaton shareholders are expected to own about 73 per cent of the combined company while the rest would be with Cooper shareholders.
"This compelling combination of Eaton's power distribution and power quality equipment and systems with Cooper's diversified component brands, global reach and international distribution creates a game changer to serve the electrical industry," Cutler noted.