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US authorities clear ABB’s Baldor takeover

US competition authorities have cleared Swedish-Swiss engineering giant ABB's takeover of American motor and generator manufacturer Baldor Electric, the company announced on Thursday.

US authorities clear ABB's Baldor takeover

ABB said in a statement that following the clearance by the Antitrust Division of the United States Department of Justice, it expected to “close the acquisition of Baldor” soon after the tender offer closed on January 25th.

Last November, it said it had agreed to buy Baldor for $4.2 billion (27.9 billion kronor).

The management of both groups had approved the transaction and ABB said at the time it would launch a tender offer to buy Baldor’s outstanding shares for $63.50 per share, a premium of 41 percent over the US group’s stock price on November 29th, 2010.

At the time, numerous law firms announced investigations into the alleged fairness of the deal. 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.

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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TAKEOVER

Scania bosses made pre-bid shares purchases

Two top Scania bosses made substantial shares purchases in the Swedish truck making company three weeks before majority owner Volkswagen made its take-over bid.

Scania bosses made pre-bid shares purchases
Scania CEO Martin Lundstedt. File photo: TT

Business daily Dagens Industri (DI) reported on Tuesday that CEO Martin Lundstedt bought a large number of shares on January 30th, several weeks before the offer was made. If the Volkswagen bid were to be accepted, Lundstedt would make 1.7 million kronor in profit, DI calculated.

Also finance head Jan Ytteberg bought shares on the same day to the tune of a half million profit in case of a successful German take-over. 

Due to their standing and insight into the company's affairs, Lundstedt and Ytterberg must by law report any changes to their shares portfolio to Sweden's Financial Supervisory Authority (Finansinspektionen – FI). 

"If you have insider information you cannot act based on that information regardless of whether you report the transaction to us or not," trade survey unit head Johan Allstrin told the TT news agency on Tuesday.

Any criminal probe, however, would be instigated by the Swedish police's financial crimes division.

As rumours were already swirling that Volkswagen would try to up its stake in the Södertälje-based company, some observers said they were surprised the two top managers would even ponder making such shares purchases. 

"It's remarkable that such high-level bosses dared go in and trade," net broker Avanza spokesman Claes Hemberg said about the the case. "They probably did not know about the bid, as then they wouldn't have had the courage to do so, but they should have been thinking long-term." 

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