Baldor Electric Company to Acquire the Power Systems Business of Rockwell Automation

Baldor Electric Co. announced that it has signed a definitive agreement to acquire the Reliance Electric Co. and certain of its affiliated companies (the "Power Systems business") of Rockwell Automation, Inc. Baldor will purchase 100% of the equity interest in the Power Systems business for $1.8 billion, comprised of $1.75 billion in cash and approximately 1.6 million shares of Baldor common stock, with a market value of $50 million, based on Baldor's volume weighted average stock price over the prior ten trading days. The transaction is expected to be completed in the first quarter of 2007 and is subject to customary closing conditions and necessary regulatory approvals.

The combined company is expected to be one of the leading North American manufacturers of industrial electric motors and power transmission products. The Power Systems business, which markets its products under the Reliance Electric® and Dodge® brand names, complements Baldor's business in industrial electric motors, drives and generators.

"The Reliance and Dodge businesses are a great fit with our existing businesses," said John McFarland, Chairman and Chief Executive Officer of Baldor. "The Power Systems business will complement and add strength to Baldor's product line. The Power Systems business, like Baldor, provides the best industrial products available in the marketplace and sells them to value-minded customers."