ABB buys GE’s Industrial Solutions unit for USD 2.6bn
Acquisition will help ABB expand access to the North American market, says CEO
Zurich, Switzerland, September 26, 2017: Swiss engineering group, ABB has purchased General Electric’s Industrial Solutions division for USD 2.6 billion, the company announced through a press communiqué.
ABB sees potential for cost synergies of USD 200 million annually after five years with the deal, which includes terms for long-term use of GE's brand, the communiqué said.
ABB CEO Ulrich Spiesshofer said: “With GE Industrial Solutions, we strengthen our number 2 position in electrification globally and expand our access to the attractive North American market. Combined with the long-term strategic supply relationship with GE, this transaction creates significant value for our shareholders.”
Initially, combining with GE's unit will reduce electrification products’ margins to below ABB's target of 15-19%, although ABB aims to return to that level by 2020, the communiqué added.
Tarak Mehta, President of ABB’s EP division, said: “This acquisition strengthens our position as the partner of choice for electrification globally and in North America. We look forward to working with GE Industrial Solutions’ and ABB’s customers and channel partners to create new opportunities in this highly attractive core market for our division.”