ABB completes divestment of Power Grids business to Hitachi
ABB announced on 1 July that it had completed of 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,” said Peter Voser, Chairman of the Board of Directors 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.
“ABB remains committed to using net cash proceeds from the transaction for a share buyback program. Our goal is to execute this in an efficient and responsible way, taking account of the prevailing circumstances.”
ABB also holds a predefined option to exit the retained 19.9% shareholding three years after closing, and it is likely it will be bought out by Hitachi, which has said it will consider acquiring ABB’s share to make it a wholly owned subsidiary after 2023.
Though Power Grids had for years accounted for more than a quarter of ABB’s revenue, according to the company, ABB in 2018 made the decision to shift away from power transmission and large-scale infrastructure projects and towards a more simplified business model and operational structure to focus efforts on streamlining core businesses and aligning them with customer operations. By the end of last year, the company had established itself with only four vertically integrated businesses: Electrification; Industrial Automation; Motion and Robotics; and Discrete Automation.
“With the divestment, ABB is well positioned for the future with a strong focus on industrial customers,” said Björn Rosengren, ABB CEO. “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.”
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