“With GE Industrial Solutions, we strengthen our No. 2 position in electrification globally and expand our access to the attractive North American market,” said ABB CEO Ulrich Spiesshofer.
GE Industrial Solutions is headquartered in Atlanta, Ga., and has about 13,500 employees around the world and 2016 revenues in the range of $2.7 billion.
ABB expects to realize about $200 million of annual cost synergies in Year 5, which will be “key in bringing GE Industrial Solutions to peer performance”. As part of the transaction and overall value creation, ABB and GE have agreed to establish a long-term, strategic supply relationship for GE Industrial Solutions products and ABB products that GE sources today.
“This combination brings together two global businesses with a broad complement of electrical protection and distribution assets,” said John Flannery, CEO of GE. “ABB values our people, domain expertise and our ability to operate in the segments where we have depth and experience. GE will also benefit through an expanded strategic supply relationship with ABB as the two companies work together.”
GE Industrial Solutions will be integrated into ABB’s Electrification Products (EP) division. Included in the acquisition is a long-term right to use the GE brand. ABB will retain the GE Industrial Solutions management team and build upon its sales force.
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“This acquisition strengthens our position as partner of choice for electrification globally and in North America,” said Tarak Mehta, president of ABB’s EP division. “We look forward to working with GE Industrial Solutions’ and ABB’s customers and channel partners to create new opportunities in this highly attractive core market for our division.”
The transaction is expected to close next year.