ABB will acquire GE Industrial Solutions, GE’s global electrification solutions business for $2.6 billion, the companies have said. The transaction is expected to close in H1 2018, subject to customary regulatory clearances.
GE Industrial Solutions will be integrated into ABB’s Electrification Products (EP) division, resulting in a global portfolio and comprehensive offering for North American and global customers. Included in the acquisition is a long-term right to use the GE brand, and ABB will retain the GE Industrial Solutions management team.
“With GE Industrial Solutions, we strengthen our Number 2 position in electrification globally and expand our access to the attractive North American market,” said ABB CEO Ulrich Spiesshofer. “Combined with the long-term strategic supply relationship with GE, this transaction creates significant value for our shareholders.”
He added: “Together with the GE Industrial Solutions team, we will execute our well-established plans in a disciplined way to bring this business as part of the global ABB family back to peer performance. With this next step of active portfolio management, we continue to shift ABB’s center of gravity, in line with our Next Level strategy, by strengthening competitiveness, mainly in the North American market, and lowering risk with an early-cycle business.”
“This combination brings together two global businesses with a broad complement of electrical protection and distribution assets,” said John Flannery, CEO of GE. “ABB values our people, domain expertise, and our ability to operate in the segments where we have depth and experience. GE will also benefit through an expanded strategic supply relationship with ABB as the two companies work together.”