ABB Buys GE’s Industrial Business; an “unloved child.” Includes Components for Lighting Control
ZURICH (Reuters) – Power grids maker ABB is buying General Electric’s Industrial Solutions business for $2.6 billion in a bet it can improve the division’s lacklustre margins over the next five years, the Swiss engineering company said on Monday.
Zurich-based ABB sees potential for annual cost benefits of $200 million with the deal, which includes an agreement for long-term use of GE’s brand and a strategic partnership. In 2016, the GE business had sales of $2.7 billion.
The GE products include circuit breakers, switchgear, components for lighting control and power supply equipment for facilities including data centres. ABB’s portfolio includes similar products.
ABB is seeking to better penetrate the North American market and gain access to GE’s larger installed base of electrical installations worldwide.
ABB said the business had been “an unloved child” and pledged to upgrade aging products with its own technology to help arrest a declining U.S. market share.
ABB is suspending its $3 billion share buyback programme as part of the deal, which will bolster its position as the second-biggest supplier of electrical components behind France’s Schneider Electric.