Take significant steps to focus and lead the digital industry, streamline business models and organizational structures, and improve customer value and shareholder returns
Take significant steps to focus and lead the digital industry, streamline business models and organizational structures, and improve customer value and shareholder returns
- Divested the power grid business and focused on the development of the digital industry
Sell power Grid business to Hitachi Group, expand existing partnerships, strengthen global power grid business leadership, expand markets and access to financing
Transfer of the entire Grid business at an enterprise valuation of $11 billion, equivalent to 11.2 times enterprise valuation/operating EBITDA
Identify the value of the grid business transformation, including a doubling of the operating margin before interest, tax and amortization compared to 2014
ABB will initially retain a 19.9% stake in the divested power grid business to ensure a seamless transition. ABB can sell the stake three years after the deal closes, at a floor price of 90 per cent of the agreed corporate valuation
The transaction is expected to close in the first half of 2020
ABB will return all net cash proceeds from the sale of 80.1% of the shares, amounting to US $7.6 to US $7.8 billion, to shareholders in a fast and efficient manner through a share repurchase or similar mechanism
- Streamline the business model and organizational structure
No longer use the traditional matrix structure
The Business unit will operate all customer-facing activities, as well as business functions and regional management, strengthening entrepreneurship
Strengthen business units by adapting experienced national management resources
The existing national and regional structures, including the Regional Executive Committee, will be terminated upon closing
The Group's efforts will focus on group strategy, portfolio and performance management, capital allocation, core technologies and the ABB Ability™ platform
- Based on the customer model, build the world's leading four business units
Create four business units ranked first or second in the world:
- The Electrical Business Unit is headed by Mehta
- The Industrial Automation Business Unit is headed by Tang Weishi
- Robotics and Discrete Automation, a combination of B&R and Robotics, led by Sam
The Motion Control business unit, which combines ABB's market-leading electric Motors and drives business, will be led by Marten, who will join the Group Executive Committee on April 1, 2019
ABB Ability™ digital solutions will enable each business unit to enhance customer value and create synergies through a common platform
Actions to strengthen ABB's leadership in digital solutions and emerging technologies such as artificial intelligence
- Financial implications for the new ABB
Group-wide annual cost reductions of $500 million
Approximately $500 million in non-operating restructuring charges
