In an article by the Nikkei Asian Review, Hitachi is in the final stages of talks to acquire the power grid business of Switzerland’s ABB for up to an estimated 800 billion yen ($7.06 billion), seeking to build up its overseas presence in a market poised for rapid growth.
Hitachi’s board on Wednesday confirmed plans to move forward with the deal, which would be the Japanese industrial conglomerate’s largest-ever acquisition. The two companies will soon conduct a final assessment of the assets of the business and are expected to reach an agreement as early as this month. The acquisition price is expected to be between 600 billion and 800 billion yen.
The deal would make Hitachi the world’s second-largest heavy electrical equipment maker by revenue, behind only General Electric.
In response, the following statement was posted on the ABB website today:
ABB confirms that it is currently in discussions with Hitachi to expand and re-define the existing strategic power grid partnership between the two companies announced in December 2014. There can be no certainty that any transaction will occur, or as to the timing, structure or terms of any transaction.
This information is information that ABB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out below, at 11:00 CET on December 12, 2018.
The proposed transaction could significantly expand Hitachi’s power sector business outside Japan while freeing up ABB to focus on its robotics, digital industry, and automation businesses.
Analysts have said the unit could be worth as much as $13bn including debt, although people close to the deal hinted at a lower figure, according to the Financial Times.
The announcement followed reports in October about a possible sale of the ABB Power Grids division: https://tedmag.com/report-abb-may-sell-power-grid-division/.
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