ABB to Keep Power Grid Unit Despite Calls for Spinoff -- Update
October 04 2016 - 2:05AM
Dow Jones News
By Brian Blackstone
ZURICH--Swiss engineering giant ABB Ltd. said Tuesday that it
plans to buy back up to $3 billion of its shares from 2017 through
2019, and that it would retain its power grids unit despite recent
calls from large shareholders that it be spun off.
The share buyback "reflects the company's confidence and the
continued strength of ABB's cash generation and financial
position," the company said.
The company reaffirmed its aim to generate 3% to 6% annual
revenue growth from 2015 to 2020.
ABB also said that "the transformation of power grids under ABB
ownership will unlock maximum shareholder value compared to other
ownership options such as sale, [initial public offering], spinoff
or joint venture."
The Wall Street Journal reported last month that two top
shareholders in ABB--Swedish activist fund Cevian Capital and
U.S.-based Artisan Partners--were urging the engineering giant to
spin off its power-grids unit to streamline operations and raise
shareholder value.
"In our strategic portfolio review we have listened carefully to
all stakeholders and all expressed views," ABB Chief Executive
Ulrich Spiesshofer said Tuesday.
"After a very thorough and detailed process, supported by
leading advisers, we have concluded that the continued
transformation of power grids under ABB's ownership creates the
highest value for our shareholders and customers," he said.
Write to Brian Blackstone at brian.blackstone@wsj.com
(END) Dow Jones Newswires
October 04, 2016 01:50 ET (05:50 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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