By Anthony Capkun
September 21, 2016 – NKT Cables has entered into a purchase agreement to acquire ABB HV Cables—a wholly owned business of the ABB Group—at an enterprise value of 712 million EUR. Including ABB HV Cables’ investment in a new cable-laying vessel to be delivered and paid in Q1 2017, the total enterprise value reaches 836 milllion EUR.
NKT designs, manufactures and supplies low- through high-voltage solutions, mainly AC. It has 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 EUR.
The combination of NKT Cables and ABB HV Cables creates a leading onshore and offshore high-voltage power cables company, says NKT. The latter is a leading player within DC high-voltage power cables, which allows NKT Cables to enter that market.
“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, NKT’s president & CEO. “We look forward to ramping up our long-term partnership that will serve future projects all around the world.”
ABB’s high-voltage cable technology and manufacturing as well as service footprint is highly complementary with NKT Cables’ activities, making the combined business ideally suited to serve the rising global demand for long-distance power transmission cable systems, says ABB.
ABB’s cable system business offers turnkey solutions including design, engineering, supply, installation, commissioning and service. It had adjusted stand-alone revenues of $524 million US 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.
“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 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.
“We are combining two strong cable portfolios, resulting in a business that is more competitive on a larger scale under NKT Cables’ ownership, whilst maintaining access to supply through a long-term strategic partnership,” said ABB CEO Ulrich Spiesshofer (photo).
“We look forward to welcoming our many new and highly skilled colleagues from ABB,” added Lyng.