ABB, a global technology company, has reached an agreement to divest to Hitachi, Ltd. (Hitachi) its remaining 19.9 percent equity stake in the Hitachi Energy joint venture that was formed from ABB’s Power Grids business in 2020, with Hitachi holding a stake of 80.1 percent. Hitachi has exercised its call option that was agreed between the parties in December 2018.
The call option’s exercise value is $1.679 billion. 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, the statement 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,” said Timo Ihamuotila, Chief Financial Officer of ABB.
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