NETHERLANDS – Dutch-based lighting company Signify has agreed to buy U.S. firm Cooper Lighting Solutions from Eaton Corp. for $1.4 billion in cash to boost its presence in North America.

The acquisition is the largest by Signify, the world’s largest lighting maker that was formerly known as Philips Lighting, since it was spun off from Philips in 2016.

Signify shares rose 4.6% to 25.00 euros in early trading in Amsterdam after the company revealed that the deal would add to earnings per share in the first year and lead to cost savings of $60 million annually within three years.

Chief Finance Officer, Stephane Rougeot said that the deal aims to boost Signify’s position in the global professional lighting market, where it is the No.2 player, and in North America, where it suffers from a lack of scale and stiff competition from rivals like Acuity Brands Inc.

“The rationale from a strategy standpoint is to get a much stronger market position in North America in professional,” said Rougeot in a telephone interview with Reuters.

Rougeot further noted that with Cooper signify they are getting a very large player in North America.

“They have great market positions, they have a large agent network, they have very deep customer relationships, they have great brands over there,”added Rougeot

The deal is expected to close in the first quarter of 2020 pending regulatory approvals.

Cooper Lighting Solutions is based in Peachtree City, Georgia and sells professional lighting and controls under the Corelite, Halo, McGraw-Edison and Metalux brands.

In 2018, tt reported sales of $1.7 billion and earnings before interest, taxes, depreciation and amortisation (EBITDA) of $187 million.

ING analyst Marc Hesselink said that although the deal was a “good strategic fit for Signify and price paid seems reasonable,” Cooper would not add technology or new capabilities to Signify’s portfolio, and the deal would not really change the growth or margin profile of the company.