ABB to sell solar inverter business
ABB’s business offering comprises products, systems and services for different types of solar installations that currently sit within ABB’s Electrification business, achieving revenues of approximately $290 million in 2018. ABB’s solar inverter business employs around 800 employees in more than 30 countries, with manufacturing and R&D sites located in Italy, India and Finland.
FIMER will honour all existing warranties, with ABB compensating FIMER for taking over the business and its liabilities. The deal will cost ABB an after-tax non-operational charge of about $430 million in the second quarter of 2019, with up to 75% to be paid in cash to FIMER. Another $40 million in separation costs is expected in the first quarter of 2020.
ABB expects the operational EBITA margin for the Electrification business to be impacted positively, by slightly more than 50 basis points, supporting the business’s progress towards its target margin corridor of 15–19%.
Tarak Mehta, President of ABB's Electrification business, said, “The divestment is in line with our strategy of ongoing systematic portfolio management to strengthen competitiveness, focus on quality of revenue and higher growth segments.
“Solar is a well-established and key focus for FIMER and as such we believe them to be a very good owner for ABB’s solar inverter business. The combination of the portfolios under FIMER will support further sales growth.
“Through our intelligent low- and medium-voltage offering, ABB will continue to integrate solar power into a range of smart solutions including smart buildings, energy storage and electric vehicle charging,” he said.
FIMER CEO Filippo Carzaniga said, “We are glad to announce this further step in our development, as FIMER’s focus on the solar business will be greatly enhanced by this integration. Our commitment to positively influencing the energy market will be realised through the development of new product platforms and innovative digital technologies.
“We will continue the excellent job carried out by ABB in recent years, combining precious resources, knowledge and expertise in Italy and worldwide. With a strengthened portfolio, we are better placed to shape the future of this increasingly strategic business,” he said.
Completion of the transaction is expected in the first quarter of 2020.
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