ABB completes buyout of Baldor Electric Company
Acquisition of US industrial motors firm strengthens ABB's reach
Power and automation technology group, ABB, announced that it has completed its acquisition of Baldor Electric Company, a North American industrial motors company. The transaction, which was originally announced on November 30, 2010, was valued at US$4.2 billion, including $1.1 billion of net debt.
The 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 in a statement.
ABB believes the combination provides an even stronger growth platform from which it 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. 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.
The acquisition will allow ABB to benefit from a projected 10-15% growth in the industrial electric motors business in the US in 2011 as a result of new energy regulations that were implemented in December 2010. 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, the company says.
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 organisations 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.”
“ABB is world renowned for the quality of its products, the skill of its people and the vision of its leaders. We are joining an absolutely top-tier organisation 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.