GENEVA — Swiss-based industrial robot maker ABB Ltd. says it is expanding its North American operations by acquiring Fort Smith-based electric-motor manufacturer Baldor Electric Co. in a deal worth $4.2 billion including debt.
The Zurich-based power and automation firm already considers North America its biggest market and employs 12,000 people there.
It announced Tuesday that Baldor has agreed to be bought in an all-cash transaction valued at $4.2 billion including $1.1 billion of net debt.
The Swiss company said it would retain Baldor’s management, brand and its Fort Smith, Arkansas headquarters. ABB will base its motor and generator business headquarters for North America in Fort Smith, company officials said.
Baldor CEO and board chairman John McFarland said in a statement that the move is in the best interest of the company's shareholders, employees and customers.
"It demonstrates the value our employees have created and the strength of our brand and products in the global motors industry," he said. "We are excited about the opportunity to join ABB’s worldwide family as we have always respected ABB."
Baldor has 7,000 employees and reported an operating profit of $184 million on revenue of $1.29 billion from January through September.
In many ways the purchase is a wager on U.S. legislation which takes effect next month and requires tougher environmental standards for electric motors used by industry.
ABB said in a statement that the deal “positions the company as a market leader for industrial motors, including high-efficiency motors” just as the U.S. market for high-efficiency motors is expected to grow up to 15 percent next year.
It also said it expects the “regulatory changes in the U.S. and other parts of the world will accelerate demand for energy-efficient industrial motion products.”
Globally, ABB employs 117,000 in operations spanning 100 countries. Earlier this year ABB acquired U.S.-based energy software company Ventyx for more than $1 billion and another American company, K-TEK, in a private deal.
In September, the U.S. Justice Department announced ABB resolved charges that two of its subsidiaries offered bribes for contracts in Mexico and kickbacks for orders for equipment and services in Iraq.
Read tomorrow's Arkansas Democrat-Gazette for full details.
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