ABB TO SELL 3 DIVISIONS WITH REVENUES HIGHER THAN $1.75B
ABB plans to offload three business units that generate $1.75 billion in sales, the Swiss engineering company said, equivalent to 6% of its annual revenue, John Revill reported for Reuters.
The company is “exploring all options” to exit turbocharging, mechanical power and power conversion, the company said ahead of its first investor day under Chief Executive Officer Bjorn Rosengren. ABB, whose products range from electric ship motors to factory robots, has been carrying out a review of its operations since Rosengren took over in March. The former Sandvik boss has said ABB has been weighed down by a business model that was too complicated.
Slimming down and disposing of businesses is the current trend in industrial companies, with rival Siemens floating its turbines business earlier this year and selling its Flender gear box unit. Earlier this year, ABB completed the sale of its power grids business to Hitachi and said it would return cash proceeds of $7.6 billion to $7.8 billion to investors.
Rosengren said all three business units were “high quality” with profit margins above the group margin corridor of 14% to 16%. Among the options being explored are complete sales or spin offs. “In this process, we will seek the best value-accretive solution for ABB and those businesses and not put ourselves under time pressure,” said Rosengren, adding portfolio reviews would remain in place. No deals are yet in place, although ABB is open to selling to industry buyers, investors or trying to separate and float the businesses.