ABB has signed a binding agreement to divest all ABB shares in Shanghai ABB Breakers Co., Ltd. and Shanghai ABB Guangdian Electric Co., Ltd. to Shanghai Guangdian Electric Group (SGEG), ABB’s joint venture partner in the two companies. Financial details were not disclosed.
Shanghai ABB Breakers Co., Ltd. and Shanghai ABB Guangdian Electric Co., Ltd. were acquired by ABB in 2018 with the GE Industrial Solutions transaction. ABB currently holds a 60 percent stake in the two joint ventures.
After the sale, the two Shanghai companies will be fully owned by SGEG, and they will continue to manufacture and market low- and medium-voltage breakers, switchgear and transformers in China. ABB and SGEG will continue to operate as long-term partners via a multi-year mutual supply agreement.
“The divestiture will reduce the complexity of the Electrification business in China and improve our focus in this key market. At the same time, it represents ABB’s ongoing active portfolio management,” said Tarak Mehta, President of ABB's Electrification business.
Completion, which is expected during Q4 2019, will be subject to the satisfaction of certain regulatory conditions required by the Shanghai Stock Exchange and China’s Ministry of Commerce. ABB will work with SGEG to ensure a smooth transition for customers and employees.
ABB's relationship with China dates back to 1907. After decades of development, ABB today has a full range of business activities in China, including R&D, manufacturing, sales and services. The company operates 44 local companies with nearly 20,000 employees located in over 130 cities. China is ABB’s second-largest market worldwide with more than 90% of sales from locally-made products, solutions and services. ABB has invested more than US$2.4 billion in China since 1992.
ABB (ABBN: SIX Swiss Ex) is a technology leader that is driving the digital transformation of industries. With a history of innovation spanning more than 130 years, ABB has four customer-focused, globally leading businesses: Electrification, Industrial Automation, Motion, and Robotics & Discrete Automation, supported by the ABB Ability™ digital platform. ABB’s Power Grids business will be divested to Hitachi in 2020. ABB operates in more than 100 countries with about 147,000 employees. www.abb.com
Important notice about forward-looking information
This press release contains forward-looking statements relating to the divestment of Shanghai ABB Breakers Co., Ltd. and Shanghai ABB Guangdian Electric Co., Ltd. by ABB. Such forward-looking statements can be identified by words such as plans, intends, expects, and other similar terms. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. No forward-looking statement can be guaranteed. Among other risks, there can be no guarantee that the divestment will be completed, or if it is completed, that it will close within the anticipated time period or that the expected benefits of the divestment will be realized. Forward-looking statements in the press release should be evaluated together with the many uncertainties that affect ABB's business, particularly those identified in the cautionary factors discussion in ABB's Annual Report on Form 20-F for the year ended December 31, 2018. ABB undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.