) has agreed to divest its Baldor's generator-set business to
Generac Holdings Inc
). The two companies signed an agreement on Oct 8. The
divestiture is expected to be completed by the fourth quarter of
2013. The financial terms of the deal were not disclosed.
Following this divestiture news, ABB's stock fell 1% and closed
at $22.77 on Oct 9.
The decision to divest the generator-set business is a
strategic decision by ABB, as this business was not 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
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, distribution
and sales of 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 and serves
residential, light commercial, industrial and construction
Recently, ABB 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
Plug Power Inc
). Rexnord carries a Zacks Rank #1 (Strong Buy), while Plug Power
carries a Zacks Rank #2 (Buy).
ABB LTD-ADR (ABB): Free Stock Analysis Report
GENERAC HOLDING (GNRC): Free Stock Analysis
PLUG POWER INC (PLUG): Free Stock Analysis
REXNORD CORP (RXN): Free Stock Analysis
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