ABB acquires Baldor Electric Company

ABB announced it completed acquisition of Baldor Electric Co. in a $4.2 billion transaction today, including $1.1 billion in debt. ABB said the move advances its strategy to become a leader in the North American industrial motors business and a global leader for movement and control in industrial applications.

01/27/2011


ABB Ltd (NYSE: ABB), provider of power and automation technology group, announced Jan. 27 that it completed acquisition of Baldor Electric Company (NYSE: BEZ), a North American manufacturer of industrial motors. www.baldor.comThe transaction, announced on Nov. 30, 2010, was valued at $4.2 billion, including $1.1 billion of net debt.

Acquisition of Baldor advances ABB’s strategy to become a leader in the North American industrial motors business and a global leader for movement and control in industrial applications, ABB said. The combination provides an even stronger growth platform from which ABB can increase its penetration of North American markets by building on Baldor’s strong presence while at the same time facilitating the sale of Baldor’s products globally through ABB’s worldwide distribution network, ABB said. The addition of Baldor’s around 6,800 North American employees brings the number of ABB’s employees in North America to approximately 17,000.

Baldor Electric world headquarters, Fort Smith, ArkansasBaldor’s leadership in high-efficiency industrial electric motors positions ABB to benefit from a projected 10-15% U.S. growth in this business in 2011 as a result of new energy regulations that were implemented in December 2010, ABB said. Similar regulations mandating higher electric motor efficiency are being implemented in numerous countries around the world beginning this year that also will benefit sales of Baldor products, according to the company.

Ron Tucker, Baldor’s president and CEO, will be responsible for running Baldor, including its mechanical power transmission products business, as well as ABB’s North American motor and generator business. These businesses will be headquartered in Fort Smith, Arkansas, USA, which is Baldor’s current headquarters location. Baldor’s former Chairman and CEO, John McFarland, will remain with the company to support a successful integration.

“Today marks a significant step forward in ABB’s strategy to become the global leader in the industrial motion market,” said Joe Hogan, ABB’s CEO. “Baldor has built an excellent reputation through its focus on innovation, quality and service, and we look forward to working together with the Baldor team to deliver solutions that support our customers and deliver on this excellent combination.”

Ulrich Spiesshofer, ABB Executive Committee member responsible for the Discrete Automation and Motion division of which Baldor is now a part, said, “From this point forward we will be working to unleash the full potential of this strategic combination. Together we have an excellent opportunity to serve our customers even better and to build a stronger business than it would be possible to do as separate companies. I am confident that the knowledge, experience and determination of people in both organizations will result in a strong, cohesive team focused on delivering exceptional products and services to our customers in North America while opening new growth opportunities around the world.”

Tucker praised ABB's product quality, the skill of its people, and the vision of its leaders. "We are joining an absolutely top-tier organization with the reach and resources to significantly extend the Baldor brand. As part of ABB’s global family, Baldor has a bright future ahead,” said Ron Tucker.

In connection with the completion of the transaction, Baldor shares have ceased trading on the New York Stock Exchange.

Citi served as financial advisor to ABB in connection with the transaction and as the dealer-manager for the tender offer. Kirkland & Ellis LLP and Jones Day acted as legal counsel to ABB. UBS Financial Services served as financial advisor to Baldor in connection with the transactions, and Gibson, Dunn & Crutcher LLP and Thompson Coburn LLP acted as legal counsel to Baldor.

ABB (www.abb.com) said it provides power and automation technologies that enable utility and industry customers to improve their performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs about 124,000 people.

Also read:

http://www.controleng.com/new-products/motors-and-drives/single-article/abb-buys-89-of-baldor-common-stock-in-tender-offer/96aa441382.html

http://www.controleng.com/home/single-article/abb-s-bid-for-baldor-gets-us-antitrust-approval/58b92d54dd.html

http://www.controleng.com/home/single-article/breaking-news-abb-s-acquisition-of-baldor-seen-as-a-big-bet-on-energy-efficiency/c5a962695f.html

http://www.controleng.com/home/single-article/abb-to-acquire-baldor-electric-co-in-a-42-billion-transaction/4c95e767c4.html

- Edited by Mark T. Hoske, CFE Media, Control Engineering, www.controleng.com.



No comments
Consulting-Specifying Engineer's Product of the Year (POY) contest is the premier award for new products in the HVAC, fire, electrical, and...
Consulting-Specifying Engineer magazine is dedicated to encouraging and recognizing the most talented young individuals...
The MEP Giants program lists the top mechanical, electrical, plumbing, and fire protection engineering firms in the United States.
High-performance buildings; Building envelope and integration; Electrical, HVAC system integration; Smoke control systems; Using BAS for M&V
Pressure piping systems: Designing with ASME; Lab ventilation; Lighting controls; Reduce energy use with VFDs
Smoke control: Designing for proper ventilation; Smart Grid Standard 201P; Commissioning HVAC systems; Boilers and boiler systems
Case Study Database

Case Study Database

Get more exposure for your case study by uploading it to the Consulting-Specifying Engineer case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.

These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.

Click here to visit the Case Study Database and upload your case study.

Protecting standby generators for mission critical facilities; Selecting energy-efficient transformers; Integrating power monitoring systems; Mitigating harmonics in electrical systems
Commissioning electrical systems in mission critical facilities; Anticipating the Smart Grid; Mitigating arc flash hazards in medium-voltage switchgear; Comparing generator sizing software
Integrating BAS, electrical systems; Electrical system flexibility; Hospital electrical distribution; Electrical system grounding
As brand protection manager for Eaton’s Electrical Sector, Tom Grace oversees counterfeit awareness...
Amara Rozgus is chief editor and content manager of Consulting-Specifier Engineer magazine.
IEEE power industry experts bring their combined experience in the electrical power industry...
Michael Heinsdorf, P.E., LEED AP, CDT is an Engineering Specification Writer at ARCOM MasterSpec.