© abb Electronics Production | July 09, 2019
ABB to exit solar inverter business
ABB and the Italian company FIMER S.p.A have signed an agreement for FIMER to acquire ABB’s solar inverter business.
ABB’s solar inverter business employs about 800 people in more than 30 countries, with manufacturing and R&D sites located in Italy, India and Finland. It includes the solar inverter business from Power-One which was acquired by ABB’s Discrete Automation and Motion division in 2013. The business offers a portfolio of products, systems, and services for different types of solar installations. It is currently within ABB’s Electrification business and achieved revenues of approximately USD 290 million in 2018. Both companies says they will ensure a smooth transition for customers and employees. FIMER will honor all existing warranties and ABB will compensate FIMER for taking the business and its liabilities over. As a result, ABB expects to take an after-tax non-operational charge of approximately USD 430 million in the second quarter of 2019 with the half-year results of 2019 being impacted accordingly. Around 75% of this charge is represented by cash outflows ABB will pay to FIMER from the deal closing date through 2025. In addition, ABB expects up to USD 40 million of carve-out related separation costs starting in the second half of 2019. Completion is expected in the first quarter of 2020 and will be subject to certain conditions, including the completion of the carve-out and prior consultation with employee representative bodies. “The divestment is in line with our strategy of ongoing systematic portfolio management to strengthen competitiveness, focus on quality of revenue and higher growth segments. Solar is a well-established and key focus for FIMER and as such we believe them to be a very good owner for ABB’s solar inverter business. The combination of the portfolios under FIMER will support further sales growth. Through our intelligent low- and medium-voltage offering, ABB will continue to integrate solar power into a range of smart solutions including smart buildings, energy storage and electric vehicle charging,” says Tarak Mehta, President of ABB's Electrification business in a press release. After closing of the transaction, ABB expects the operational EBITA margin for the Electrification business to be impacted positively by slightly more than 50 basis points, supporting the business’ progress towards its target margin corridor of 15-19%.