ABB has signed a definitive agreement to divest its Mechanical Power Transmission division (Dodge) to RBC Bearings Incorporated for $2.9 billion in cash.
The transaction will create a leading manufacturer of highly engineered, performance-critical bearings and motion control components. The transaction is expected to be completed by the end of the year 2021, subject to customary closing conditions, including regulatory review.
For more than 140 years, the Dodge business has been a leader in the design, production, and marketing of mounted bearings, enclosed gearing, and power transmission components.
It offers one of the broadest portfolios of mechanical power transmission products in the market, selling to industries such as surface mining, aggregates & cement, warehousing and food & beverage.
Dodge has roughly 1,500 employees worldwide and achieved revenues of approximately $600 million for the last twelve months ending June 30, 2021, of which more than 90 per cent were generated in the Americas.
The company has six manufacturing sites – five in the US and one in China – and is headquartered in Greenville, South Carolina. The president of the division is Roger Costa.
ABB CEO, Bjorn Rosengren, said Dodge has found an excellent new home with RBC Bearings.
“This transaction further strengthens ABB’s balance sheet. In line with our capital allocation priorities, we plan to first use the proceeds from the transaction to fund organic growth, pay a rising sustainable dividend per share and make value-creating acquisitions,” he said.
RBC Bearings chair, president and CEO, Dr. Michael J. Hartnett, said Dodge will enhance RBC Bearings’ capabilities and footprint.
“Our businesses are highly complementary, with Dodge bringing new offerings, new end markets, and more scale to the combined organisation,” he said.