ABB completes divestment of Power Grids to Hitachi
July 01 2020 - 5:45AM
Dow Jones News
ABB today reached a significant milestone in the company's
transformation towards a decentralized global technology company,
with the completion of the divestment of 80.1 percent of its Power
Grids business to Hitachi, as planned.
The divestment allows ABB to focus on key market trends and
customer needs such as the electrification of transport and
industry, automated manufacturing, digital solutions and increased
sustainable productivity.
"Today's announcement marks an important turning point in the
history of ABB. Since announcing our intention to divest Power
Grids to Hitachi, ABB has made significant progress in becoming a
more customer-focused and simplified organization. We believe
Hitachi is the best owner for Power Grids and its next stage of
development, building on the solid foundation achieved under ABB's
previous ownership," said Peter Voser, Chairman of the Board of
Directors of ABB. "ABB remains committed to using net cash proceeds
from the transaction for a share buyback program. Our goal is to
execute this in an efficient and responsible way, taking account of
the prevailing circumstances."
Consistent with ABB's capital structure optimization program,
ABB plans to return to shareholders net cash proceeds of $7.6--7.8
billion from the sale of Power Grids. ABB initially intends to
launch a share buyback program of 10 percent(1) of the company's
issued share capital shortly after the release of its second
quarter 2020 financial results. This represents about 180 million
shares, when excluding treasury shares.
The share buyback program will be executed on a second trading
line on the SIX Swiss Exchange and is planned to run until the
company's Annual General Meeting (AGM) on March 25, 2021. At the
AGM, ABB intends to request shareholder approval to cancel the
shares purchased through this program and to announce further
details on its ongoing capital structure optimization program. ABB
aims to maintain its "single A" credit rating.
"With the divestment, ABB is well positioned for the future with
a strong focus on industrial customers. Leveraging our technology
leadership and passion for innovation, we will now focus on
creating superior value for our customers, employees and
shareholders. We will do this by evolving our decentralized
business model, strengthening our performance management culture
and driving active portfolio management," said Björn Rosengren, ABB
CEO.
ABB is a long-term partner of Hitachi and will initially retain
a 19.9 percent equity stake in the joint venture that will operate
as Hitachi ABB Power Grids and be headquartered in Switzerland. The
joint venture is a global leader in power systems, with annualized
revenues of approximately $10 billion and roughly 36,000 employees,
serving customers in over 90 countries. The Board of Directors of
the joint venture includes Timo Ihamuotila, Chief Financial Officer
of ABB, and Frank Duggan, former member of ABB's Executive
Committee. Hitachi ABB Power Grids will be led by Claudio Facchin
as CEO.
The transaction terms with Hitachi remain as announced on
December 17, 2018, with an enterprise value of $11 billion for 100
percent of the business. ABB has a pre-defined option to exit the
retained 19.9 percent shareholding three years after closing.
ABB (ABBN: SIX Swiss Ex) is a leading global technology company
that energizes the transformation of society and industry to
achieve a more productive, sustainable future. By connecting
software to its electrification, robotics, automation and motion
portfolio, ABB pushes the boundaries of technology to drive
performance to new levels. With a history of excellence stretching
back more than 130 years, ABB's success is driven by about 110,000
talented employees in over 100 countries. www.abb.com
Important notice about forward-looking information
This press release includes forward-looking information and
statements which are based on current expectations, estimates and
projections about the factors that may affect our future
performance, including the economic conditions of the regions and
industries that are major markets for ABB. These expectations,
estimates and projections are generally identifiable by statements
containing words such as "expects", "believes", "estimates",
"plans", "targets", or similar expressions. However, there are many
risks and uncertainties, many of which are beyond our control, that
could cause our actual results to differ materially from the
forward-looking information and statements made in this press
release and which could affect our ability to achieve any or all of
our stated targets. The important factors that could cause such
differences include, among others, business risks associated with
the volatile global economic environment and political conditions,
costs associated with compliance activities, market acceptance of
new products and services, changes in governmental regulations and
currency exchange rates and such other factors as may be discussed
from time to time in ABB Ltd's filings with the U.S. Securities and
Exchange Commission, including its Annual Reports on Form 20-F.
Although ABB Ltd believes that its expectations reflected in any
such forward-looking statement are based upon reasonable
assumptions, it can give no assurance that those expectations will
be achieved.
(1) Maximum 10 percent of the company's issued share capital,
including treasury shares
View source version on businesswire.com:
https://www.businesswire.com/news/home/20200701005404/en/
CONTACT: ABB Ltd
Affolternstrasse 44
8050 Zurich
Switzerland
Media Relations
Phone: +41 43 317 71 11
Email: media.relations@ch.abb.com
Investor Relations
Phone: +41 43 317 71 11
Email: investor.relations@ch.abb.com
SOURCE: ABB
Copyright Business Wire 2020
(END) Dow Jones Newswires
July 01, 2020 05:30 ET (09:30 GMT)
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