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Regal-Beloit Acquires GE HIVAC & Capacitor division

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  • RemyC
    From: http://www.regal-beloit.com/GEHVAC.pdf At the Heart of What Drives Your World January 3, 2005 CONTACT: - David A. Barta 608-364-8808, ext 106 VP, Chief
    Message 1 of 1 , Feb 13, 2005

      "At the Heart of What Drives Your World"
      January 3, 2005

      - David A. Barta
      608-364-8808, ext 106
      VP, Chief Financial Officer
      - Kenneth F. Kaplan
      VP, Treasurer & Secretary
      608-364-8808, ext. 104

      Completes Acquisition of HVAC/Refrigeration
      Motor and Capacitor Operations from General Electric

      Beloit, WI - January 3, 2005 - REGAL-BELOIT CORPORATION (AMEX:RBC) today
      announced that it has completed the purchase of General Electric Company's
      (NYSE:GE) Heating, Ventilation and Air Conditioning (HVAC)/Refrigeration
      Motors and Capacitors operations of GE Consumer & Industrial. The
      HVAC/Refrigeration Motors and Capacitors operations include a full line of
      motors for residential HVAC applications and capacitors for HVAC and high
      intensity lighting applications.

      The transaction closed at 11:59 pm (EST) on December 31, 2004. The purchase
      price was $270 million in cash and the issuance of 4.56 million shares of
      the Company's common stock which, based on the closing price on December 31,
      2004, results in total consideration of approximately $400 million. The
      Company estimates that the future tax benefits related to the deductibility
      of goodwill and intangible asset amortization to have an estimated present
      value of $45 million to $50 million.

      REGAL-BELOIT expects the acquisition to add sales of approximately $500
      million in 2005 and, including an estimated $.20 per share of one-time costs
      and the impact of related financing activities, to add $.32 to $.34 to 2005
      diluted earnings per share.

      Key attributes of the acquisition include:
      . Aleading market position for electric motors used in central heating and
      air conditioning systems.
      . Expansion of the Company's customer base to include major HVAC OEMs.
      . Patented variable speed motor technology.
      . Expansion of the Company's global manufacturing capabilities.
      . Use of the trade name "GE HVAC Motors by Regal-Beloit" for a period of up
      to 15 years.

      James L. Packard, CEO and Chairman of REGAL-BELOIT CORPORATION commented,
      "This is a defining acquisition. We believe this acquisition, coupled with
      the acquisition of the Commercial AC Motor business we completed in August,
      makes us the largest Commercial/Industrial motor producer in the United
      States as well as the leader in HVAC motors. Equally important, these
      acquisitions bring impressive technology and significant low cost
      manufacturing resources to our Company. We are excited about the potential
      for these businesses and the outstanding employees that will be joining our
      Company. We are particularly pleased to announce that Mark Gliebe, formerly
      General Manager of GE Motors & Controls, will also be joining REGAL-BELOIT.

      The HVAC/Refrigeration Motors and Capacitors operations are based in Fort
      Wayne, Indiana. Included in the sale are motor manufacturing facilities in
      Springfield, Missouri; Reynosa, Mexico; and Faridabad, India and a capacitor
      manufacturing facility in Juarez, Mexico. The business also has technology
      resources located in Hyderabad, India.

      The Company financed $270 million of the purchase price through the
      amendment and expansion of its bank credit facility. The remainder of the
      purchase price was paid to GE in common stock of the Company, based on the
      issuance of 4.56 million shares of REGAL-BELOIT common stock in a private
      placement. GE entered into a shareholder's agreement with REGAL-BELOIT
      related to the common stock issued to GE as part of the transaction. The
      shareholder's agreement, among other things, provides GE with the
      opportunity to sell its REGAL-BELOIT stock over a defined period and under
      certain circumstances.

      The Company will hold a conference call at 1 p.m. CST (2 p.m. EST) on
      Thursday, January 6, 2005 to discuss the acquisition. To participate in the
      call, investors should call 888-867-5802 at the scheduled time and ask for
      the REGAL-BELOIT conference call, passcode 10671623. The call will be
      available by digital replay through January 14, 2004 at 877-213-9653,
      passcode 10671623. Robert W. Baird & Co. served as the financial advisor to

      REGAL-BELOIT CORPORATION (AMEX:RBC) is a leading manufacturer of mechanical
      and electrical motion control and power generation products serving markets
      throughout the world.

      REGAL-BELOIT is headquartered in Beloit, Wisconsin, and has manufacturing,
      sales, and service facilities throughout the United States and Canada, and
      in Mexico, Europe and Asia.

      For more information, visit the Company's website at
      "At the Heart of What Drives Your World"

      Cautionary Concerning Forward-Looking Statements

      This press release may include certain "forward-looking statements" intended
      to qualify for the safeharbors from liability established by the Private
      Securities Litigation Reform Act of 1995. Statements other than statements
      of historical fact (including, without limitation, statements relating to
      the integration and future financial performance of the HVAC/Refrigeration
      Motors and Capacitors operations) are considered forward-looking statements.
      These statements are based on management's current expectations and are
      subject to certain risks and uncertainties which could cause actual results
      or outcomes to differ materially from those currently anticipated. Factors
      that could affect actual results or outcomes include: unexpected issues and
      costs arising from the consolidation of the HVAC/Refrigeration Motors and
      Capacitors operations; marketplace acceptance of the acquisition;
      unanticipated fluctuations in commodity prices and issues associated with
      the Company's ability to pass increased prices on to its customers; and
      changes in global political, economic, business, competitive, market and
      regulatory factors as detailed in the Company's filings with the Securities
      and Exchange Commission. Shareholders, potential investors and others are
      urged to consider these factors in evaluating the forward-looking statements
      and are cautioned not to place undue reliance on such forward-looking
      statements. The forward-looking statements included herein are made only as
      of the date of this press release, and the Company undertakes no obligation
      to publicly update such forward-looking statements to reflect subsequent
      events or circumstances.

      For more information:

      Media: Fritz Hollenbach
      V.P. Administration & Human Resources
      Telephone: 608/364-8808, X107
      fhollenbach@ regal-beloit.com

      Financial: Dave Barta
      Chief Financial Officer
      Telephone: 608/364-8808, X106
      dbarta@ regal-beloit.com

      Corporate Offices
      200 State Street . Beloit, WI 53511-6254
      608-364-8808 . Fax: 608-364-8818
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