Swiss engineering major ABB on Tuesday said it has signed a pact to divest Mechanical Power Transmission division (Dodge) to RBC Bearings for USD 2.9 billion. The transaction will create a manufacturer of highly engineered, performance-critical bearings and motion control components, ABB said in a statement.
The transaction is expected to be completed by the end of 2021, it added.
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 component, it said.
Dodge has roughly 1,500 employees worldwide and achieved revenues of approximately USD 600 million for the last twelve months ended June 30, 2021, of which more than 90 per cent were generated in the Americas.
“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,” ABB CEO Björn Rosengren said.
ABB expects to record a non-operational pre-tax book gain of approximately USD 2.2 billion on the sale of Dodge, it stated.