ABB divested its mechanical power transmission division (Dodge) to RBC Bearings for $2.9 billion

The deal creates a leading manufacturer of highly engineered performance-critical bearings and motion control components

The transaction is expected to close by the end of 2021

Cash proceeds are used based on capital allocation priorities

ABB today announced that it has signed a definitive agreement to divest its Mechanical Power Transmission Division (Dodge) to RBC Bearings Incorporated (Nasdaq: ROLL) 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 close by the end of 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 gears and power transmission components. It offers one of the broadest mechanical power transmission product portfolios on the market, sold to industries such as surface mining, aggregates and cement, warehousing, and food and beverage.

Dodge has approximately 1,500 employees worldwide and generated revenues of approximately $600 million in the trail 12 months ended June 30, 2021, more than 90% of which came from the Americas. The operating EBITA margin was approximately 23%. It manufactures at six manufacturing sites — five in the United States and one in China — and its headquarters are located in Greenville, South Carolina. The president of the division is Roger · Costa.

Björn Rosengren, CEO ·of ABB, said: "We are delighted that Dodge has found a great new home with RBC Bearing, where it can continue its exciting growth story. "This transaction further strengthens ABB's balance sheet. In line with our capital allocation priorities, we plan to first use the proceeds of the transaction to fund organic growth, pay rising sustainable dividends per share, and make value-creating acquisitions. In addition, we will provide an update in due course on the turbo exit plan and the possible listing of our EV division. ”

"Today, we are very pleased to announce that ABB and RBC Bearings have signed an agreement to acquire Dodge. The merger will strengthen RBC Bearings' capabilities, footprint and customer access, while increasing our exposure in Dodge's attractive end markets. Our businesses are highly complementary, and Dodge brings new products, new end markets, and greater scale to the combined organization. Dr. Michael J. Hartnett, chairman, president and chief executive officer of RBC Bearings, said the combined company will have an attractive position in the aerospace, defense and industrial markets, with a diverse customer base and a broad geographic footprint. "We look forward to welcoming Dodger's talented team to RBC Bearings."

ABB expects to receive a non-operating pre-tax proceeds of approximately $2.2 billion from the sale of Dodge. ABB also expects transaction-related cash tax outflows of approximately $400 million.

J.P. Morgan served as exclusive financial advisor and Kirkland & Ellis LLP served as legal counsel to ABB.

Important Notice Regarding Forward-Looking Information

This press release contains forward-looking statements in connection with ABB's divestiture of its Mechanical Power Transmission (Dodge) division. Such forward-looking statements can be identified by words such as plan, intend, anticipate and other similar terminology. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, shift or alter any of them, and could cause actual results and results to differ materially from current expectations. Forward-looking statements cannot be assured. Among other risks, there can be no assurance that the divestment will be completed or, if so, that the expected benefits of the divestment will be completed or that the divestment will be realized within the expected time period. The forward-looking statements in this press release should be evaluated in conjunction with the many uncertainties affecting ABB's business, in particular those identified in the discussion of cautionary factors in ABB's 20-F Annual Report. ABB undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

ABB divested its mechanical power transmission division (Dodge) to RBC Bearings for $2.9 billion

ABB divested its mechanical power transmission division (Dodge) to RBC Bearings for $2.9 billion

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