Global power and automation technology company ABB will strengthen its position in the electrification sector through the acquisition of GE Industrial Solutions for $US2.6 billion ($3.3 billion).
GE Industrial Solutions provides smart and rugged electrical products for use in a range of industries including mining and oil and gas. Headquartered in the United States, It has around 13,500 employees worldwide and in 2016 had revenues of approximately $US2.7 billion.
As part of the acquisition, ABB and GE have agreed to establish a long-term, strategic supply relationship for GE Industrial Solutions products and ABB products.
“With GE Industrial Solutions, we strengthen our Number 2 position in electrification globally and expand our access to the attractive North American market,” ABB CEO Ulrich Spiesshofer said. “Combined with the long-term strategic supply relationship with GE, this transaction creates significant value for our shareholders.”
GE CEO John Flannery said, “This combination brings together two global businesses with a broad complement of electrical protection and distribution assets. ABB values our people, domain expertise, and our ability to operate in the segments where we have depth and experience. GE will also benefit through an expanded strategic supply relationship with ABB as the two companies work together.”
GE Industrial Solutions will be integrated into ABB’s Electrification Products (EP) division which provides a portfolio of low- and medium-voltage products. GE will also benefit from ABB’s innovative technologies.
Earlier this year, ABB held its 2017 Digital Transformation Summit in Brisbane, exploring the importance of implementing digitalisation across the mining, oil and gas, and energy sectors. The event reinforced the need for companies, particularly in the mining and resources sector, to implement innovative strategies to address efficiency needs and cost reduction efforts.
Under the acquisition, ABB has a long term right to use the GE brand and will retain the GE Industrial Solutions management team.
The acquisition is expected to close in the first half of 2018.