Billion-euro deal
ABB acquires GE Industrial Solutions
ABB has announced its intention to acquire the global electrification solutions business from General Electric (GE). The purchase price is 2.6 billion US dollars.
According to ABB, GE Industrial Solutions has strong customer relationships in more than 100 countries and an established installed base with strong roots in North America, ABB's largest market. GE Industrial Solutions is headquartered in Atlanta, Georgia, employs around 13,500 people worldwide and generated sales of around USD 2.7 billion in 2016 with an operating EBITDA margin of around 8% and an operating EBITA margin of around 6%.
"With the acquisition of GE Industrial Solutions, we will strengthen our position as the global number 2 in electrification and improve our access to the attractive North American market," said Ulrich Spiesshofer, CEO of ABB, adding: "Together with the GE Industrial Solutions team, we will execute our carefully designed integration plan in a disciplined manner to bring GE Industrial Solutions back to a competitive level as part of the global ABB family."
Specifically, GE Industrial Solutions will be integrated into ABB's Electrification Products (EP) division. With the acquisition, ABB also acquires the right to use the GE brand on a long-term basis. The acquisition should also help to bring the EP division back into the targeted margin corridor of 15% to 19% in 2020.
As a result of this transaction, ABB has decided to temporarily suspend the previously announced share buyback program. The transaction is expected to close in the first half of 2018 and is subject to customary regulatory approvals.
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