ABB Ltd has completed its acquisition of Baldor Electric Company in a transaction valued at $4.2billion, including $1.1billion of net debt. This acquisition is said to advance 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. 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. The addition of Baldor's 6800 North American employees brings the number of ABB's employees in North America to approximately 17,000.
Baldor's leadership in high-efficiency industrial electric motors positions ABB to benefit from a projected 10-15 per cent growth in this business in the USA 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 in 2011, that also will benefit sales of Baldor products.
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.
Joe Hogan, ABB's CEO, states: "Today marks a significant step forward in ABB's strategy to become the global leader in the industrial motion market. 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, says: "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 adds: "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."