© abb Electronics Production | July 03, 2020
ABB completes divestment of Power Grids to Hitachi
ABB has reached a significant milestone in the company’s transformation towards a decentralized global technology company, with the completion of the divestment of 80.1% of its Power Grids business to Hitachi.
The divestment will allow 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. “Since announcing our intention to divest Power Grids to Hitachi, ABB has made significant progress in becoming a more customer-focused and simplified organization. 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,” says Peter Voser, Chairman of the Board of Directors of ABB, in a press release. “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 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 focused on power systems, with annualised revenues of approximately USD 10 billion and roughly 36,000 employees, serving customers in over 90 countries “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 decentralized business model, strengthening our performance management culture and driving active portfolio management,” says Björn Rosengren, ABB CEO. The transaction terms with Hitachi remain as initially announced, with an enterprise value of USD 11 billion for 100% of the business. ABB has a pre-defined option to exit the retained 19.9% shareholding three years after closing.