ABB, the Swiss engineering group said that it has reached an agreement to divest to Hitachi, Ltd. (Hitachi) its remaining 19.9 per cent equity stake in the Hitachi Energy joint venture, worth $1.679 billion.
Hitachi exercised its option to buy the stake in the joint venture formed from ABB’s Power Grids business in 2020. The companies have agreed to settle remaining obligations relating to the original transaction, and ABB will continue to provide transition services to Hitachi Energy for them to fully separate from ABB’s systems.
ABB does not expect to record any significant gain or loss as a result of the sale. ABB expects net positive cash inflows of approximately $1.425 billion upon closing of the sale. The transaction is subject to regulatory approvals and closing is expected to happen in the fourth quarter 2022, it said in a statement. Timo Ihamuotila, Chief Financial Officer of ABB said:
“We are delighted to have agreed on the final part of the transaction earlier than expected and on favorable terms. This will further strengthen our balance sheet and give us additional flexibility in our capital allocation decisions.”
Hitachi drives Social Innovation Business, creating a sustainable society with data and technology. We will solve customers’ and society’s challenges with Lumada solutions leveraging IT, OT (Operational Technology) and products, under the business structure of Digital Systems & Services, Green Energy & Mobility, Connective Industries and Automotive Systems.
Driven by green, digital, and innovation, we aim for growth through collaboration with our customers. The company’s consolidated revenues for fiscal year 2021 (ended March 31, 2022) totaled 10,264.6 billion yen ($84,136 million USD), with 853 consolidated subsidiaries and approximately 370,000 employees worldwide.