8/17/2023 0 Comments Abb power grids finance ltdHowever, ABB could now be under pressure to improve the performance of Power Grids business fast.Īnother company in the same space as ABB is AO Smith Corp. This will boost demand for complex electricity distribution systems, thus unlocking huge growth opportunities for the unit. Such strategic alliances form a core pillar of ABB’s Next Level strategy to drive growth.ĪBB’s decision to retain the Power Grids unit reflects the company’s conviction that the business can gain significantly from the worldwide shift from a centralized fossil fuel power system towards renewable energy. Per ABB, the two new alliances, in addition to greater focus on higher-margin consultancy services and software, will help increase the unit’s margin target to 10-14% (up from a previous target of 8-12%).ĪBB LTD-ADR Price and Consensus | ABB LTD-ADR QuoteĪBB also announced a strategic partnership with Microsoft Corporation MSFT, to shore up its capabilities in the industrial internet market, by combining cloud technology with industrial digital technology. Per the contract, Aibel will be responsible for turnkey EPC services for the design, construction, installation and commissioning of the offshore platforms, while ABB will focus on high voltage direct current technology. Through the strategic partnership, ABB and Fluor will execute large turnkey engineering, procurement, construction (“EPC”) electrical substation projects.įurther, ABB formed an agreement to partner with Aibel to deliver offshore wind integration solutions. The deal was signed to cater to the growing needs of power grids worldwide for safe, dependable and state-of-the-art electrical substations. It inked a partnership deal with engineering and construction firm Fluor Corporation FLR. The Power Grids business signed three important deals last week. The company claims that this step will streamline operations and raise shareholder value. Per The Wall Street Journal, two of ABB’s top shareholders - Swedish activist fund Cevian Capital and U.S.-based Artisan Partners - were urging the company to spin off its Power Grids business. Importantly, ABB indicated that the restructuring will likely include a strong shift toward digital offerings. It also announced plans last week to buy back up to $3 billion of its shares from 2017 through 2019.ĪBB said it will continue its active portfolio management plan, including strategic acquisitions as well as divesting non-core businesses. Further, it raised its targeted cost savings (under a plan launched last year) by 30% to $1.3 billion. In the process, ABB will fine tune the structure and scope of some of its divisions as well. The company also intends to consolidate all of its brands globally, over a period of two years. Instead, it stated that it will continue to streamline and transform the unit under its own ownership. However, the company decided against letting the Power grids business go. The company has decided to sell its global high-voltage cable system business to NKT Cables in a deal worth about $934 million.The deal is part of ABB’s active portfolio management and will make the core power grids business simpler, stronger, and more focused. Last month, ABB took the first major step in the strategic evaluation of its massive Power Grids division. Spiesshofer has raised nearly $2 billion in proceeds from such activities. The Swiss engineering giant believes that it can capitalize on budding industry trends like smart grids and linking renewable energy production to consumers.Ĭhief Executive – Ulrich Spiesshofer – has been divesting underperforming businesses regularly since he took the helm over three years ago. The company insists that revamping the division instead would unlock more value for shareholders, compared to floating, spin-off or sale of the business. ABB has decided to hold on to its Power Grids business. Rebuffing the demands from an activist investor, ABB Ltd.
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