WEG S.A. (BOVESPA:WEGE3) entered into a definitive agreement to acquire Industrial Motors and Generators businesses from Regal Rexnord Corporation (NYSE:RRX) for $400 million on September 23, 2023. The $400 million of consideration will be on a cash and debt free basis, and paid in cash. Net proceeds from the transaction will be used to reduce our debt. The transaction includes the acquisition of 10 manufacturing sites in 7 countries (United States, Mexico, China, India, Italy, Netherlands and Canada), plus commercial branches in 11 countries, and a team of approximately 2,800 employees worldwide.

The closing of the transaction, which is subject to obtaining required regulatory approvals and meeting customary closing conditions, is expected to occur in the first half of 2024. As of September 27, 2023, the transaction is subject to approval from governmental authorities in several jurisdictions and is expected to close in the second half of 2024. As of November 3, 2023, transaction is expected to close in the first half of 2024.

Guggenheim Securities, LLC is serving as financial advisor to Regal Rexnord, and Godfrey & Kahn, S.C. is serving as legal counsel. S. Wade Angus and Artur L. Badra of Jones Day acted as legal advisor to WEG S.A. Alex Nikitine and Simone Wetzstein of Walder Wyss acted as legal advisors to WEG S.A. in the transaction. Vaidhyanadhan Iyer and Jeet Chaudhuri of AZB & Partners acted as legal advisors to WEG S.A.

WEG S.A. (BOVESPA:WEGE3) completed the acquisition of Industrial Motors and Generators businesses from Regal Rexnord Corporation (NYSE:RRX) on April 30, 2024. The Company closed the transaction for total consideration of $400 million, approximately 17% of which is deferred and will be paid upon the completion of the China Business transfer.[The total consideration remains subject to taxes, transaction expenses, working capital adjustments and customary post-closing adjustments. The Company anticipates that aggregate net proceeds will approximate $355 million. The Company intends to use the aggregate net proceeds from the transaction to reduce its debt, which in combination with deploying the majority of its forecasted 2024 free cash flow to debt reduction, should enable the Company to repay most of its variable interest rate debt by the end of 2024. The Indian leg of the global transaction resulted in Regal Rexnord Corporation selling 100% of its stake in Marathon Electric Motors (India) Limited to WEG Holding B.V., a group entities of WEG S.A.

Gaurav Dayal, Sushrut Biswal and S. Vasudevan of Lakshmikumaran & Sridharan acted a legal advisor and legal due diligence provider represented Regal Rexnord Corporation in connection with the Indian leg of a Global Transaction Involving the acquisition of the Industrial Electric Motors and Generators Business of Regal Rexnord Corporation.