ABB continues to make news this week, with the announcement of an offer to purchase US electric-motor manufacturer Baldor Electric Co in an all-cash transaction valued at approximately $4.2 billion, including $1.1 billion of net debt.
The transaction closes a gap in ABB’s automation portfolio in North America by adding Baldor’s strong NEMA motors product line. Baldor also adds a growing and profitable mechanical power transmission business to ABB’s portfolio.
“Baldor is a great company with an extremely strong brand in the world’s largest industrial market,” said Joe Hogan, ABB’s CEO. “Baldor’s product range and regional scope are highly complementary to ours and give both companies significant opportunities to deliver greater value to our customers.”
Recommending the deal, John McFarland, chairman and CEO of Fort Smith, Arkansas-based Baldor said: “Our board of directors believes this transaction is in the best interest of our shareholders, our employees and our customers. It demonstrates the value our employees have created and the strength of our brand and products in the global motors industry.
“We are very pleased that ABB will locate its motor and generator business headquarters for North America in Fort Smith and we are confident that the combined global platform will be well positioned to capitalize on meaningful growth opportunities in the future.”
John McFarland will stay with the combined business to support a successful integration.Ron Tucker, Baldor’s current president and COO, and CEO designate will run Baldor and ABB’s motor and generator business in North America after the transaction is completed.
The US market for high-efficiency motors is expected to grow 10 to15 percent in 2011 on the back of new regulations, effective in December this year.
“ABB and Baldor will be able to offer our North American and global customers an unparalleled range of high-efficiency industrial products and services to help them meet their new demands,” said Ulrich Spiesshofer, executive committee member responsible for ABB’s Discrete Automation and Motion division, into which Baldor’s business will be integrated alongside the existing motors and generators business.
“We are deeply impressed by the skill and passion of the Baldor team and their excellent customer relationships,” Spiesshofer added. “The strength of Baldor’s people and executive team, which will continue under the new ownership, will play a key role in our mutual success.”
