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ABB expects double-digit earnings growth

Swedish-Swiss engineering giant ABB announced that its $4.2 billion offer to buy US industrial electric motor group Baldor Electric was a success, adding that it expects double-digit growth in fourth quarter operating income.

ABB expects double-digit earnings growth

ABB said that following the Tuesday closing of the offer, it had received 89.4 percent of Baldor’s shares. It would acquire the remaining shares at $63.50 per share, a premium of 41 percent over the US group’s stock price on November 29th, 2010, and de-list the company from Wall Street, it added.

US competition authorities green-lighted the takeover last week and the management of both groups have approved the transaction. Arkansas-based Baldor employs about 7,000 people and reported an operating profit of $184 million in the first nine months of 2010.

ABB plans to integrate Baldor into its motors and generators business, a move which it has said would bring about savings of $200 million annually by 2015.

ABB, which will announces its earnings results on February 17th, said it expected double-digit growth in its fourth-quarter operating income, as well as double-digit growth in orders in local currency terms.

Baldor Electric was founded in 1920 by Edwin Ballman and Emil Doerr. The name of the company was derived using part of each of their names.

In 1967, the company’s headquarters were moved from St. Louis, Missouri to Fort Smith, Arkansas. On January 31st, 2007, Baldor Electric acquired the Dodge and Reliance Electric brands from Rockwell Automation for $1.8 billion.

ABB is one of the largest engineering companies and conglomerates in the world. It has operations in around 100 countries with about 117,000 employees and reported global revenue of $31.8 billion for 2009.

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BUSINESS

Japan’s NEC to buy Danish IT firm KMD for billions

Japanese multinational NEC said Thursday that it would buy Denmark's largest IT firm KMD for $1.2 billion as part of its effort to expand its European and global businesses.

Japan’s NEC to buy Danish IT firm KMD for billions
File photo: Liselotte Sabroe/Ritzau Scanpix

Under the plan, the information technology giant will buy all shares of KMD Holding ApS for 8 billion kroner by the end of February next year, NEC said in a statement.

“Through this acquisition, NEC will acquire a business model that leverages platforms in the digital government domain as it aims to expand business from northern Europe to the whole of Europe and globally,” it said.

The acquisition will be finalised after NEC completes the necessary procedures, including getting the approval of the European Commission.

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