NEW YORK (AP) â¿¿ ABB, a Swiss automation company, is spending $3.1 billion to gain instant access to the U.S. market for high-end industrial motors and perhaps more importantly, an inroad to growing demand for the machines worldwide.

ABB said Tuesday it would acquire Baldor Electric Co., based in Fort Smith, Ark., at 41 percent premium to the company's closing share price Monday.

But the deal comes just three weeks before the Energy Independence and Security Act of 2007 goes into effect, which will boost efficiency requirements for industrial motors in the U.S.

That is a specialty for Baldor, which has reported revenue of $1.29 billion so far this year.

The deal pairs a leader in the U.S. market with ABB, a company with a $44 billion market cap and a delivery pipeline that can put Baldor's technology not only into Europe Canada, Mexico, but also into rapidly expanding China and India.

ABB expects the U.S. market for high-efficiency motors will grow up to 15 percent next year. Similary efficiency rules are expected next year in Canada, Mexico and the European Union, the company said.

With more efficient, high-end industrial motors the norm in developed countries, experts believe developing nations will adapt to that technology by default.

"This move comes at a time when regulatory changes in the U.S. and other parts of the world will accelerate demand for energy efficient industrial motion products," the company said Tuesday.

Baldor's motors are used everywhere, from factory assembly lines, mines, pulp production centers and paper manufacturing, to food processing.

"They're going to go where they're needed," said Nicholas Heymann, an analyst with Sterne, Agee & Leach. "So anywhere you have large-scale applications."

ABB said Baldor approved the buyout at $63.50 a share, sending the U.S. company's shares up by 40 percent to an all-time high of $63.26.

Including debt, the acuisition is worth $4.2 billion in cash. The deal is expected to close in the first three months of 2011.

North America is already ABB's biggest market and it employs 12,000 people on the continent. Its U.S. operations are headquartered in Cary, N.C., but ABB said it would retain Baldor's management, brand and headquarters in Arkansas.

ABB Ltd. employs 117,000 people at operations that 100 countries.

The Baldor deal comes just three months after ABB lost its bid for the British power supply company Chloride Group, which was acquired by U.S. competitor Emerson Electric Co. $1.5 billion.

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