ABB Ltd. has completed its acquisition of Baldor Electric Company. The transaction, which was originally announced on November 30, 2010, was valued at $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. 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 around 6,800 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 percent growth in this business in the United States 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.
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, 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."