UPDATE 1-Rexnord to merge motion control unit with Regal Beloit in $3.69 bln deal

(Adds details on the deal)

Feb 16 (Reuters) - Rexnord Corp will merge its process and motion control (PMC) business with larger rival Regal Beloit Corp in a deal that values the unit at about $3.69 billion, the power transmission components makers said on Tuesday.

The deal is tax-free for Rexnord shareholders because it is structured as a so-called Reverse Morris Trust, with Rexnord spinning off the unit and simultaneously merging it with Regal Beloit.

Rexnord’s PMC business makes power transmission components for industrial machinery and equipment, and expands a portfolio of similar products manufactured by Regal Beloit, the companies said in a joint statement.

The deal, which will close in the fourth quarter of 2021, is expected to result in cost savings of $120 million within three years for Regal.

Upon completion, Regal shareholders will own 61.4% and Rexnord shareholders 38.6% of the combined entity.

Some of the industries served by the two companies include renewable energy, food and beverage, automation, aerospace, and e-commerce. (Reporting by Ankit Ajmera in Bengaluru; Editing by Shounak Dasgupta and Ramakrishnan M.)