ABB to divest two Shanghai-based joint ventures
ABB has signed a binding agreement to divest all ABB shares in Shanghai ABB Breakers Co., Ltd. and Shanghai ABB Guangdian Electric Co., Ltd. to Shanghai Guangdian Electric Group (SGEG), ABB’s joint venture partner in the two companies.
Shanghai ABB Breakers Co., Ltd. and Shanghai ABB Guangdian Electric Co., Ltd. were acquired by ABB in 2018 with the GE Industrial Solutions transaction. ABB currently holds a 60 percent stake in the two joint ventures.
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After the sale, the two Shanghai companies will be fully owned by SGEG, and they will continue to manufacture and market low- and medium-voltage breakers, switchgear and transformers in China. ABB and SGEG will continue to operate as long-term partners via a multi-year mutual supply agreement.
“The divestiture will reduce the complexity of the Electrification business in China and improve our focus in this key market. At the same time, it represents ABB’s ongoing active portfolio management,” said Tarak Mehta, President of ABB’s Electrification business.
Completion, which is expected during Q4 2019, will be subject to the satisfaction of certain regulatory conditions required by the Shanghai Stock Exchange and China’s Ministry of Commerce. ABB will work with SGEG to ensure a smooth transition for customers and employees. Financial details were not disclosed.
The company operates 44 local companies with nearly 20,000 employees located in over 130 cities. China is ABB’s second-largest market worldwide with more than 90% of sales from locally-made products, solutions and services. ABB has invested more than $2.4 billion in China since 1992.
Photo (for illustrative purposes): ABB China Headquarters / ABB / With Permission