ABB Completes Acquisition of GE Industrial Solutions
July 4, 2018
The US$2.6 billion transaction, announced last September, offers substantial value creation potential within ABB, including growth opportunities from coupling ABB’s digital offering, ABB Ability, with the extensive GEIS installed base.
GEIS will be integrated into ABB’s Electrification Products (EP) division, led by EP President Tarak Mehta, as a new business unit called Electrification Products Industrial Solutions (EPIS). Stephanie Mains, who was previously the President and CEO of the GE Industrial Solutions business, will lead the new business unit as Managing Director. As part of the transaction, ABB has established a long-term strategic supply relationship with GE to supply them with products and solutions from across the ABB portfolio. Included in the acquisition is a long-term right to use the GE brand.
“The combination reinforces ABB’s position as a worldwide leader in electrification and accelerates our growth and competitiveness in key markets, particularly North America,” says ABB CEO Ulrich Spiesshofer. “As one of Thomas Edison’s original businesses, GEIS is the cradle of electrification — a legacy that we will preserve and build on, now that GEIS is part of ABB.”
“The product portfolios of GE Industrial Solutions and ABB are highly complementary,” said Tarak Mehta. “Together we will have a comprehensive combined portfolio, as well as an expanded global footprint, sales force and distribution network. We are committed to servicing the GEIS installed base and will now be able to provide a more technologically advanced and digitally connected offering to our customers around the world. Together we will strengthen ABB’s #2 position in electrification globally and expand our access to the attractive North American market.”
ABB expects to realize approximately US$200 million of annual cost synergies in year five, which will be key in bringing GEIS to peer performance.
