ABB acquires underperforming GE Industrial Solutions

ABB acquires underperforming GE Industrial Solutions

Swiss Firm ABB to Buy GE's Industrial Solutions Business

"Without that, the economics wouldn't have worked", he told reporters on a call.

The purchase adds to the more than 470 acquisitions already agreed by European buyers for U.S. businesses so far this year - the busiest year-to-date for such deals since 2008, according to analysis of data from Dealogic.

With GE Industrial Solutions, we strengthen our Number 2 position in electrification globally and expand our access to the attractive North American market.

The GE products include circuit breakers, switchgear, components for lighting control and power supply equipment for facilities including data centers. The deal comes months after it bought an Austrian industrial-software company for about $2 billion to plug a gap in its automation business. "And then afterwards, we will make this business bigger and better", said ABB Chief Executive Ulrich Spiesshofer.

ABB is seeking better access to the North American market and greater access to GE's larger base of electrical installations worldwide.

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For GE, the transaction marks the first major portfolio change under CEO John Flannery, who took over on August 1 and is trying to reverse this year's biggest stock slide on the Dow Jones Industrial Average. The least profitable division, appliances, has already been sold, leaving grid solutions and power conversion as the segments remaining businesses.

He added: "Together with the GE Industrial Solutions team, we will execute our well-established plans in a disciplined way to bring this business as part of the global ABB family back to peer performance".

Flannery, who handled mergers and acquisitions for GE in 2013 and 2014, has said he'll outline his plans for the Boston-based company and its portfolio in November.

GE stock closed up about 0.5% last Friday at $24.87 and traded up about 0.1% in Monday's premarket session. The price target range is $21 to $36.

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