ZURICH, Switzerland ( TheStreet) -- ABB ( ABB), the Swiss engineering company, agreed to buy Baldor Electric ( BEZ) for $63.50 a share, or $3.1 billion, in cash.

Including net debt, the overall transaction value is $4.2 billion, ABB said in a press release Tuesday.

The transaction represents a 41% premium to Baldor's closing stock price Monday of $45.11.

The boards of both companies have approved the deal, which is expected to close in the first quarter of 2011.

ABB said it expects annual synergies of more than $100 million and "significant global revenue synergies of at least the same amount."

ABB expects the transaction to be accretive to earnings in the first year.

"The transaction will substantially improve ABB's access to the industrial customer base in North America, opening opportunities for ABB's wider portfolio including energy efficient drives and complementary motors," ABB said.

Baldor specializes in large industrial motors.

-- Written by Joseph Woelfel

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