ABB and Hitachi have had a close business relationship since 2014. The purchase price now agreed with Hitachi corresponds to an enterprise value of 11 billion US dollars. To ensure a seamless transition, ABB will initially retain a 19.9% stake in the joint venture. The transaction agreement includes an option for its sale, which ABB can exercise three years after the closing of the transaction.

Until completion of the transaction, which ABB expects by the end of the first half of 2020, the Group will report the Power Grids business as "discontinued operations". The net proceeds of USD 7.6 to 7.85 billion from the sale of the 80.1 percent stake will be "distributed to shareholders in a timely and efficient manner through a share buyback or similar mechanism", the company said.

With effect from April 1, 2019, ABB also intends to simplify its organizational structure by dissolving the previous matrix structure. The new organization will give each business unit full operational responsibility for products, functions and local business activities.

Specifically, ABB will create four entrepreneurially managed business units: Electrification, Industrial Automation, Robotics & Factory Automation and Drive Technology. According to ABB, the volume of the addressable market will grow by USD 140 billion to USD 550 billion by 2025. This corresponds to annual growth of 3.5 to 4 %.

The Electrification division

The existing Electrification division will offer a portfolio of products, digital solutions and services from the distribution substation to the socket. It will address a market volume of currently 160 billion US dollars, which is growing by an average of 3% per year in the long term. Electrification will be headed by Tarak Mehta, who is currently in charge of the Electrification Products division. In the twelve-month period to September 2018, Electrification would have generated sales of around USD 13 billion, including an assumed sales contribution for this period from GE Industrial Solutions (GEIS), which was acquired on June 30, 2018.

New: The Industrial Automation division

In the newly formed Industrial Automation business unit, ABB bundles industry-specific integrated automation solutions, electrification and digital solutions, control technologies, software and advanced services as well as offerings for measurement & analysis and for ships and turbochargers. The addressable market with a volume of 90 billion US dollars is expected to grow by an annual average of 3 to 4 % over the long term. The division will be headed by Peter Terwiesch, who is currently in charge of the Industrial Automation division. In the twelve-month period to September 2018, Industrial Automation would have generated sales of around USD 7 billion.

New: The Robotics & Production Automation division

The newly formed Robotics & Factory Automation division will combine machine and factory automation solutions, mainly from B&R, with the most comprehensive suite of robotics solutions and applications. The addressable market already has a volume of 80 billion US dollars and is expected to grow by an average of 6 to 7% per year in the long term. Robotics & Factory Automation is headed by the current Head of the Robotics and Drives division, Sami Atiya, and would have generated sales of around USD 4 billion in the twelve-month period to September 2018.

The Drive Technology division

The Drive Technology division will comprise electric motors, generators, drives and services as well as solutions for integrated digital drive solutions. ABB estimates the addressable market at 80 billion US dollars, with average growth of around 3% per year. Morten Wierod, currently Head of the Drives business unit, will take over the division. He will be appointed to the Executive Committee as of April 1, 2019. Drive Technology would have generated sales of around 6 billion US dollars in the twelve-month period to September 2018.