ABB reached a significant milestone in the company’s transformation towards a decentralized global technology company, with the completion of the divestment of 80.1 percent of its Power Grids business to Hitachi, as planned.
The divestment allows ABB to focus on key market trends and customer needs such as the electrification of transport and industry, automated manufacturing, digital solutions and increased sustainable productivity.
“Today’s announcement marks an important turning point in the history of ABB. Since announcing our intention to divest Power Grids to Hitachi, ABB has made significant progress in becoming a more customer-focused and simplified organization. We believe Hitachi is the best owner for Power Grids and its next stage of development, building on the solid foundation achieved under ABB’s previous ownership,” said Peter Voser, Chairman of the Board of Directors of ABB. “ABB remains committed to using net cash proceeds from the transaction for a share buyback program. Our goal is to execute this in an efficient and responsible way, taking account of the prevailing circumstances.”
Consistent with ABB’s capital structure optimization program, ABB plans to return to shareholders net cash proceeds of $7.6–7.8 billion from the sale of Power Grids. ABB initially intends to launch a share buyback program of 10 percent1 of the company’s issued share capital shortly after the release of its second quarter 2020 financial results. This represents about 180 million shares, when excluding treasury shares.
The share buyback program will be executed on a second trading line on the SIX Swiss Exchange and is planned to run until the company’s Annual General Meeting (AGM) on March 25, 2021. At the AGM, ABB intends to request shareholder approval to cancel the shares purchased through this program and to announce further details on its ongoing capital structure optimization program. ABB aims to maintain its “single A” credit rating.
“With the divestment, ABB is well positioned for the future with a strong focus on industrial customers. Leveraging our technology leadership and passion for innovation, we will now focus on creating superior value for our customers, employees and shareholders. We will do this by evolving our decentralized business model, strengthening our performance management culture and driving active portfolio management,” said Björn Rosengren, ABB’s CEO.