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Business deals

ABB in talks with Hitachi and others on sale of power grid unit

Swiss industrial group seeks to unload business valued at over $10bn

Swiss industrial group ABB is reportedly in talks with Hitachi and others to sell its power grids business.   © Reuters

WOLFSBURG, Germany -- Switzerland's ABB is reportedly in talks with multiple suitors to sell its power grid business, including Hitachi and a major Chinese company.

The Swiss engineering group is believed to be weighing a full or partial sale of the division, as well as a spinoff and public listing. Selling the entire business could fetch the company more than $10 billion. ABB said it cannot comment on the matter. Hitachi also declined to comment.

The power grid division markets such equipment as transformers, power transmission and distribution equipment, and control systems in India, China, North America, Europe and elsewhere. It logged revenue of roughly $10 billion in 2017, accounting for about 30% of ABB's annual total.

Compared with robotics and other leading businesses, ABB's power grid arm suffers from low profitability.

Asked about the possibility of selling the power grid business, ABB CEO Ulrich Spiesshofer said on an earnings conference call in October that, "When the time is right to talk more about it, we will talk about that."

In Japan, Hitachi and Mitsubishi Electric have power grid operations. The former formed a joint venture with ABB in 2015 that supplies equipment.

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