Baldor Electric Co., Fort Smith, Ark., announced it will acquire the Reliance Electric Co. and affiliated companies (the Power Systems business) from Rockwell Automation Inc. Baldor will purchase the Power Systems business for $1.8 billion. The transaction is expected to close in the first quarter of 2007.

With this addition, Baldor will increase its market share, positioning itself as one of the largest providers of motion control and power transmission products, says Baldor chairman and CEO John McFarland.

The Power Systems business, which markets its products under the Reliance Electric and Dodge brand names, complements Baldor's business in industrial electric motors, drives, and generators. Dodge products include mounted bearings and enclosed gearing, and Reliance Electric industrial motors include large ac and custom, variable speed and specialty, and small and medium ac motors.

“The Reliance and Dodge businesses are a great fit with our existing businesses,” McFarland says. “Dodge products have been available for more than 125 years, Reliance motors for more than 100 years, and Baldor motors for more than 85 years. All three have long histories and strong reputations in the industrial marketplace.”

In addition, the acquisition will add about $1 billion more in sales with margins higher than Baldor's. It also provides a manufacturing base in China for Asian markets.