ABB to divest cable business

NKT Cables is acquiring ABB’s global high-voltage cable system business with a total enterprise value of €836 million (US$934 million). The business is part of ABB’s Power Grids division, which is currently undergoing a strategic review.

High-voltage cables are key components in sustainable energy networks, used for transmitting large amounts of electricity over long distances.

NKT Cables designs, manufactures and supplies power cables for low-, medium- and high-voltage solutions mainly in the alternating current (AC) area.It has major production facilities in Europe and China, as well as sales offices around the world, and employs around 3200 people. In 2015, revenue was €1.2 billion.

“We are combining two strong cable portfolios rooted in a shared Nordic heritage that will be more competitive on a larger scale under NKT Cables’ ownership, while maintaining access to supply through a long-term strategic partnership,” said ABB CEO Ulrich Spiesshofer.

“The combination of our niche cable system business with the strength of NKT Cables demonstrates our commitment to active portfolio management, a key element of our Next Level strategy,” he said.

ABB’s high-voltage cable technology and manufacturing, as well as its service footprint, is highly complementary with NKT Cables’ activities, making the combined business suited to serve the rising global demand for long-distance power transmission cable systems.The combined operational scale and reach of the two businesses is expected to lead to even better service for global customers.

“ABB’s high-voltage cable business will add considerable strength to our portfolio and bring us a world-class manufacturing operation. We will leverage the technology, domain competence and highly skilled workforce to grow this business,” said Michael Hedegaard Lyng, president and CEO of NKT Cables.

 “We look forward to ramping up our long-term partnership that will serve future projects all around the world,” he said.

ABB’s cable system business offers turnkey solutions including design, engineering, supply, installation, commissioning and service. It had adjusted standalone revenues of US$524 million in 2015, employs around 900 people and has state-of-the art manufacturing and R&D capabilities for high-voltage submarine and underground cables in Karlskrona, Sweden. The transfer of assets also includes a new, cutting-edge cable-laying vessel, currently under construction.

“As part of the strategic partnership, ABB and NKT Cables will work together on future projects to access market opportunities in areas like subsea interconnections and direct current (DC) transmission links”, said Claudio Facchin, president of ABB’s Power Grids division.

The transaction is anticipated to close in Q1 2017, subject to regulatory clearances and fulfilment of the closing conditions.