New Delhi
Swiss
engineering major ABB has signed a pact to divest the Mechanical Power
Transmission division (Dodge) to RBC Bearings for $2.9 billion. The
transaction, expected to be completed by the end of 2021, will create a
manufacturer of highly engineered, performance-critical bearings and motion
control components, ABB said in a statement.
For over 140
years, the Dodge business has been a leader in the design, production and
marketing of mounted bearings, enclosed gearing, and power transmission
components. The division has around 1,500 employees worldwide. It recorded
revenues of approximately $600 million for the last twelve months ended June
30, 2021, of which more than 90% was generated in the Americas.
ABB expects to
record a non-operational pre-tax book gain of approximately $2.2 billion on the
sale of Dodge. The company also expects transaction-related cash tax outflows
at approximately $400 million.
J.P. Morgan is
acting as exclusive financial adviser and Kirkland & Ellis LLP is serving
as legal counsel to ABB on the transaction.
Björn Rosengren,
CEO, ABB, said that ABB will use the $2.9 billion to fund organic growth, pay a
rising sustainable dividend per share and make value-creating acquisitions.
RBC Bearings is
an international manufacturer and marketer of highly engineered precision
bearings and components. The company is headquartered in Oxford, Connecticut.
Source – ET Energyworld
Image Source: ABB Website
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