Regal Beloit to pay $875 million for A.O. Smith’s motor biz

(BestGrowthStock) – U.S. industrial major Regal Beloit Corp (RBC.N: ) said it agreed to acquire the electric motor business of rival A.O. Smith Corp (AOS.N: ) in a cash-and-stock deal worth about $875 million.

The deal is of $700 million in cash, and about $175 million in shares of its common stock, Regal Beloit said in a statement.

Regal Beloit, a maker of industrial motors and power generators, said it expects the acquisition to add annual sales of over $700 million in the first full year following the acquisition.

The company expects the deal to be accretive in the first full year, excluding one-time items, Regal Beloit said.

The transaction is expected to close in the first half of 2011, A.O. Smith said in a separate statement.

The A.O. Smith deal follows Swiss engineering group ABB’s (ABBN.VX: ) $3.1 billion deal for industrial motor maker Baldor Electric Co (BEZ.N: ) two weeks ago.

The two back-to-back deals reveal the trend of industrial firms, focused on the power-related applications, looking to capitalize on an increased demand for energy efficiency.

Shares of Milwaukee, Wisconsin-based A.O. Smith, which rose 34 percent of their value in the last six months, rose 2 percent to $43.73 in early morning trade on the New York Stock Exchange. Regal Beloit shares rose 5 percent to $66.75.

(Reporting by Bijoy Koyitty in Bangalore; Editing by Jarshad Kakkrakandy)

Regal Beloit to pay $875 million for A.O. Smith’s motor biz