Amsterdam, the Netherlands— The supervisory board of Elsag Bailey Process Automation N.V. (EBPA) began seeking offers June 4 to purchase the whole company. The process automation firm has annual revenues of about $1.5 billion, and employs 11,000 people in 30 countries.

The board's action followed a May 28 privatization move by Elsag Bailey's controlling shareholders—Finmeccanica SpA and Istituto per la Ricostruzione Industriale (IRI) SpA—to sell Finmeccanica's "attractive and valuable" majority stake in the company. EBPA's board also chose Merrill Lynch International to be the exclusive financial adviser to assist in managing the sale process, which was scheduled to begin immediately. Finmeccanica's board also approved Merrill Lynch's recommendation to offer EBPA's interests separately from any other Finmeccanica assets.

"We've worked hard in the past 24 months to restructure our business units for substantial cost savings, divest noncore and under-performing assets, launch significant high-technology products, and position Elsag Bailey as a leader in our markets," says Vincenzo Cannatelli, EBPA's managing director and ceo. "All these improvements make our business portfolio quite attractive to a long-term buyer, and I believe the process will lead to substantial benefits to our shareholders, employees, and customers."

Though potential purchasers are being sought, EBPA adds there is no assurance that a sale will occur or what form such a transaction might take. To maximize shareholder value, EBPA's board has set up an independent directors committee, including T. Kevin Dunnigan and Josef Felder, to help evaluate any proposed transactions.

In a May 28 statement, Mr. Cannatelli added the decision to sell EBPA "results from our majority owner's desire to raise capital through the privatization of certain assets, and should in no way be considered an adverse reflection on the performance of our company. Elsag Bailey has consistently been described as one of the strongest performing businesses among Finmeccanica's holdings. This distinction makes our company an attractive and valuable investment candidate to other potential shareholders."

Because Finmeccanica desires that EBPA be sold as one unit to maintain its "one-stop-shop" position in the process automation field, it will likely take a suitor of exceptional size and strength to purchase EBPA. For example, one of several conceivable buyers might be Siemens AG, which is planning some future growth by acquisition to strengthen its position in process automation.