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.


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 ( 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:

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

No comments
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
The System Integrator Giants program lists the top 100 system integrators among companies listed in CFE Media's Global System Integrator Database.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
This eGuide illustrates solutions, applications and benefits of machine vision systems.
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
Choosing controllers: PLCs, PACs, IPCs, DCS? What's best for your application?; Wireless trends; Design, integration; Manufacturing Day; Product Exclusive
Variable speed drives: Smooth, efficient, electrically quite motion control; Process control upgrades; Mobile intelligence; Product finalists: Vote now; Product Exclusives
Machine design tips: Pneumatic or electric; Software upgrades; Ethernet advantages; Additive manufacturing; Engineering Leaders; Product exclusives: PLC, HMI, IO
This article collection contains the 5 most referenced articles on improving the use of PID.
Learn how Industry 4.0 adds supply chain efficiency, optimizes pricing, improves quality, and more.

Find and connect with the most suitable service provider for your unique application. Start searching the Global System Integrator Database Now!

Cyber security cost-efficient for industrial control systems; Extracting full value from operational data; Managing cyber security risks
Drilling for Big Data: Managing the flow of information; Big data drilldown series: Challenge and opportunity; OT to IT: Creating a circle of improvement; Industry loses best workers, again
Pipeline vulnerabilities? Securing hydrocarbon transit; Predictive analytics hit the mainstream; Dirty pipelines decrease flow, production—pig your line; Ensuring pipeline physical and cyber security