ABB to buy Industrial Solutions division from GE for US$2.6B
by The Associated Press
ABB says it will retain the right to use GE's brand over the long-term, and expects synergies of about $200 million per year after five years
GENEVA—Swiss robotics and industrial machinery maker ABB is buying the electrification services unit of U.S. conglomerate General Electric in a deal valued at $2.6 billion, boosting its presence in its crucial North American market.
The deal between ABB, which provides high-tech equipment for the transport, utility and infrastructure industries, and GE is expected to close in the first half of next year.
GE Industrial Solutions, headquartered in Atlanta, has about 13,500 employees around the world. In 2016, GE Industrial Solutions had revenues of approximately $2.7 billion
In a joint statement, the companies say the electrification services unit was not a “core business” for GE.
“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 in a press release. “Combined with the long-term strategic supply relationship with GE, this transaction creates significant value for our shareholders.”
The Swiss company expects the transaction to add to its bottom line within the first year. ABB says it will retain the right to use GE’s brand over the long-term, and expects synergies of about $200 million per year after five years.
The deal will require approval from national regulators.