ABB, a leading power and automation technologygroup, and Baldor Electric Co., a NorthAmerican leader in industrial motors, have agreed that ABB will acquire Baldorin an all-cash transaction valued at approximately $4.2 billion, including $1.1billion of net debt. The deal is subject to regulatory and shareholderapproval, but the combined company would become an even larger market leader inindustrial motion control.

"The value in this acquisition is mainly inthe fit between the two companies. The product lines are highly complementaryand there is almost no overlap," says Bob Fesmire, media relations manager forABB.

Baldor is a leading manufacturer of electricmotors that fall under the NEMA specifications for the North American market,and ABB offers motors with the IEC standard that basically serves Europe andthe rest of the world. "ABB is a major supplier of drives and motorcontrollers, so we see a lot of synergy between marrying ABB drives with Baldormotors," says Fesmire.

"Geographically, Baldor has a large footprintin the U.S. market while ABB has a stronger market presence in other parts ofthe world. The acquisition is subject to regulatory and shareholder approval,but we're looking at the first quarter of next year to close the deal," headds.

The acquisition is expected to create growth,enabling ABB to penetrate the North Americanindustrial market by using Baldor's strongNorth American market access and allow Baldor to expand globally by using ABB'sdistribution network abroad.

Approximately 30 percent of Baldor's revenuecomes from mechanical power transmission products such as gears and bearings. Thatis a business where ABB has not been involved historically, but it offers amajor growth opportunity in the future.

Energy efficiency is another a key area forthe two companies with new U.S. standards implemented on December 19, 2010 thatwill require motors sold after that date to meet the new standards. Baldor hasalready been selling NEMA motors under the new standard, and have a robustproduct line-up of energy efficient motors in an area that is expected to grow10 to 15 percent in 2011. Similar regulations are expected in Canada, Mexicoand in the European Union beginning in 2011.

"Baldor is a great company with an extremelystrong brand in the world's largest industrial market," says Joe Hogan, ABB'sCEO. "Baldor's product range and regional scope are highly complementary toours and give both companies significant opportunities to deliver greater valueto our customers."

John McFarland, Chairman of the Board and CEOof Baldor, comments: "Our Board of Directors believes this transaction is inthe best interest of our shareholders, our employees and our customers. We arevery pleased that ABB will locate its motor and generator business headquartersfor North America in Fort Smith and we are confident that the combined globalplatform will be well positioned to capitalize on meaningful growthopportunities in the future." It's been announced that McFarland will stay withthe combined business to support a successful integration.

Ron Tucker, Baldor's current presidentand COO, and CEO designate will run Baldor including the mechanical powertransmission products business, and ABB's motor and generator business in NorthAmerica after the transaction is completed.