Chennai, NFAPost: Global technology company ABB has completed the divestment of 80.1% of its Power Grids business to Hitachi, as planned.
The divestment allows ABB to focus on key market trends and customer needs such as the electrification of transport and industry, automated manufacturing, digital solutions and increased sustainable productivity.
“Today’s announcement marks an important turning point in the history of ABB. Since announcing our intention to divest Power Grids to Hitachi, ABB has made significant progress in becoming a more customer-focused and simplified organisation. We believe Hitachi is the best owner for Power Grids and its next stage of development, building on the solid foundation achieved under ABB’s previous ownership,” said ABB Chairman of the Board of Directors Peter Voser.
ABB is a long-term partner of Hitachi and will initially retain a 19.9% equity stake in the joint venture that will operate as Hitachi ABB Power Grids and be headquartered in Switzerland. The joint venture is a global leader in power systems, with annualised revenues of approximately $10 billion and roughly 36,000 employees, serving customers in over 90 countries.
The Board of Directors of the joint venture includes Timo Ihamuotila, Chief Financial Officer of ABB, and Frank Duggan, former member of ABB’s Executive Committee. Hitachi ABB Power Grids will be led by Claudio Facchin as CEO.
“With the divestment, ABB is well positioned for the future with a strong focus on industrial customers. Leveraging our technology leadership and passion for innovation, we will now focus on creating superior value for our customers, employees and shareholders. We will do this by evolving our decentralised business model, strengthening our performance management culture and driving active portfolio management,” said ABB CEO Björn Rosengren.
The transaction terms with Hitachi remain as announced on December 17, 2018, with an enterprise value of $11 billion for 100% of the business. ABB has a pre-defined option to exit the retained 19.9% shareholding three years after closing, the company said.
ABB energises the transformation of society and industry to achieve a more productive, sustainable future. By connecting software to its electrification, robotics, automation and motion portfolio, ABB pushes the boundaries of technology to drive performance to new levels. ABB’s success is driven by about 110,000 employees in over 100 countries.