ABB ABB Ltd

  By John Revill 
 

ZURICH--The largest shareholder in ABB Ltd. (ABB ABBN.VX) has increased its stake in the Swiss-based electrical engineering giant past 10%, in a show of support for the struggling company which has just launched a strategic review of its operations.

Sweden's Investor AB (INVE-B.SK) has raised its stake to 10.03% from roughly 9.5% in Zurich-based ABB, according to a regulatory filing.

Investor AB has been steadily increasing its investment in ABB from around 6% earlier this year and has invested 2.16 billion Swedish kroner ($250 million) in the last three months. Overall, Investor AB has invested SEK9 billion in ABB over the last three and a half years, it said.

"We have gradually increased our ownership; we have invested in the company for a long time and we think it is a good investment," said Stefan Stern, spokesman for Investor AB, the investment vehicle of Sweden's Wallenberg family which has been involved in ABB and its predecessor companies for nearly 100 years.

Mr. Stern declined to comment on Investor AB's future investment strategy, but said it supported the new overhaul announced by ABB Chief Executive Ulrich Spiesshofer in September, where ABB lowered its growth targets and could see it sell off its $12.6 billion power grids business.

"We are behind the action plan and believe that it makes industrial sense and is value creating," Mr. Stern said. He said it was too early to say whether the power grids business should be sold off.

"We are standing behind the management and their strategy," he said. "The review is necessary in itself to follow up the merger of Power systems-and Power Products divisions and make sure the structure is working."

Investor AB's move is the latest share maneuvering in ABB, whose shares have lost near 11% this year as the company struggled with slowing demand in China and weaker conditions in the oil and gas market.

ABB's second-biggest investor, Cevian Capital has increased its stake to 5.2% and has called on the company to speed up efforts to increase its efficiency.

Last month ABB's Mr. Spiesshofer said he expected markets to remain tough well into 2016, and the company would continue to focus on improving its profitability.

ABB welcomed Investor AB's increased involvement. "We appreciate their continued engagement and input," said company spokesman Michael Schiendorfer.

Write to John Revill at john.revill@wsj.com

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(END) Dow Jones Newswires

November 10, 2015 11:31 ET (16:31 GMT)

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