Hitachi Ltd. today announced that it has decided to acquire the power grids business from ABB Ltd and has signed an agreement with ABB. Hitachi plans to initially acquire an 80.1 per cent stake in the power grids business and expects to close the acquisition in the first half of 2020. Hitachi has entered into a purchase option to acquire the remaining 19.9 per cent stake in power grids, making power grids a wholly-owned subsidiary.
“Hitachi and ABB agreed to the enterprise value of the company operating power grids business separated from ABB as US$11 billion. The purchase price of 80.1 per cent stake is expected to be approx. US$6.4 billion after deducting debt like item from the enterprise value,” a statement issued by Hitachi said.
Toshiaki Higashihara, President and CEO of Hitachi said, “Today’s agreement between ABB and Hitachi is a significant turning point in the global power and energy markets at a time when digital technology is fundamentally changing our society and the pattern of energy demand and supply is diversifying. Hitachi will combine ABB’s strengths in the power grids business with our digital technology to build an energy platform that contributes to innovating the energy business. This creates further innovation for business fields such as life and industry and helps us address society’s issues and improve quality of life”
Ulrich Spiesshofer, CEO of ABB, said, “ABB’s power grids business will strengthen Hitachi as global leader in energy infrastructure and Hitachi will strengthen the position of ABB’s power grids business as a global leader. Our shareholders will directly benefit through the return of the proceeds of the divestment.”
ABB’s power grids business operates four segments: Grid automation, grid integration, high voltage products, and transformers.