) announced the completion of the sale of its Baldor's
generator-set business to
Generac Holdings Inc
) on Nov 1, 2013. Since then, ABB's stock price has surged 1.07%
to $25.48 till the close of trading on Nov 6, 2013. The deal to
divest the business was signed on Oct 8, and was projected to be
completed by the fourth quarter of 2013. The financial terms of
the deal were not disclosed.
The decision to divest the generator-set business is a
strategic decision by ABB, as this business did not form a part
of the company's core portfolio business. In fiscal 2012, this
division contributed only 3% to the total revenue. The
generator-set business was part of the acquisition of Baldor
Electric by ABB in 2011.
The divestiture is expected to be a win-win situation for both
ABB's Baldor Electric and Generac. Through the sale of the
generator-set division, Baldor Electric will primarily focus on
industrial electric motors and mechanical power transmission
products, which are in line with ABB's core portfolio. While for
Generac, buying this generator biz will be beneficial as the
company is primarily focused on the manufacturing, distributing
and selling this type of generator products.
Generac is a leading designer and manufacturer of a wide range
of generators and other engine-powered products. The company is
one of the leading providers of power equipment serving
residential, light commercial, industrial and construction
ABB has completed various acquisitions to gain more focus on
its core business, which include automation and power. Now this
divestiture further emphasizes the company's commitment to
continuously optimize its portfolio.
ABB, a global leader in power and automation technologies,
currently carries a Zacks Rank #3 (Hold). Other stocks worth
considering at the moment are
AO Smith Corp
). AO Smith carries a Zacks Rank #1 (Strong Buy) while Rexnord
carries a Zacks Rank #2 (Buy), while Plug Power carries a Zacks
Rank #2 (Buy).
ABB LTD-ADR (ABB): Free Stock Analysis Report
SMITH (AO) CORP (AOS): Free Stock Analysis
GENERAC HOLDING (GNRC): Free Stock Analysis
REXNORD CORP (RXN): Free Stock Analysis
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