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ABB Ltd. (ABB) Tuesday launched an GBP860 million offer for U.K.-based Chloride Group PLC (CHLD.LN), the latest in a succession of deals as the Swiss engineering giant spends its cash pile.

The Zurich-based company didn't rule out going higher to clinch at least 75% of Chloride, but said it felt it had "put a good offer on the table" with its 325 pence-a-share bid, Chief Executive Joe Hogan said.

Should the bid prevail, ABB would banish St. Louis-based Emerson Electric Co. (EMR), which has pursued Chloride at least twice. Most recently, Chloride two months ago rejected a GBP723 million takeover proposal--or 275 pence a share--from Emerson as too low.

Chloride's shares shot higher after ABB's bid, which was 12% higher than Chloride's 289 pence closing price Monday and was deemed at the upper end of what is economically justifiable by several analysts.

At 0857 GMT, Chloride shares traded up 51 pence, or 18%, at 339 pence, amid a 0.4% fall in the Stoxx Europe 600 industrial good and services index. Meanwhile, ABB's stock traded up CHF0.06, or 0.3%, at CHF19.28.

Analysts said Chloride's sale price could go higher yet, after Emerson said it was weighing its options.

ABB had been talking to Chloride about a potential collaboration for roughly 18 months, but ABB intensified the talks when Emerson proposed a takeover, CEO Hogan told reporters.

"Obviously, Emerson putting them into play forced us to move faster than we would have, but we had been talking to them for some time," Hogan said.

ABB is after Chloride's uninterrupted power supplies business, especially in the medium- and high-power segment of the market, where ABB sees growth opportunities. Other potential rivals for Chloride could include Schneider Electric SA (SU.FR) and Eaton Corp. (ETN). Schneider declined to comment, while Eaton wasn't immediately available for comment.

Analysts generally welcomed ABB's bid, but most cautioned on the high price.

"In our view, the key issue for investors will be the conference call and the extent to which ABB can illustrate credible revenue and cost synergies, and remove any potential concerns that it could be over-paying for this deal," Goldman Sachs analyst Tim Rothery wrote in a note to investors. Goldman ranks ABB on its conviction buy list of pan-European stocks.

Chloride's board backs the ABB bid, and shareholders will receive a 3.3-pence-a-share final dividend, as proposed by Chloride last month, ABB said.

ABB would be left with ample firepower--roughly $3 billion in net cash--and still has the appetite for more deals, even after its recent acquisitions and paying its dividend, Chief Financial Officer Michel Demare said.

"This does not temper our ambition to look for more value-creating acquisitions in the future, even larger ones than we have done so far," without losing its investment-grade rating, Demare said.

Chloride is the latest in a string of deals for ABB since May, including software maker Ventyx for more than $1 billion, U.S. measurement product maker K-TEK for an undisclosed price, as well as the $965 million attempt to lift its stake in ABB's Indian subsidiary to 72% from 52% currently.

Swiss investment bank Credit Suisse Group (CS) is advising ABB.

-By Katharina Bart, Dow Jones Newswires; +41 43 443 8043; katharina.bart@dowjones.com

(Jason Douglas in London contributed to this article.)

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