ABB to exit solar inverter segment
The transaction will enable ABB to focus its business portfolio on other growth markets. Approximately 800 staff are employed in ABB’s solar inverter segment in more than 30 countries, with manufacturing and R&D sites located in Italy, India and Finland. It includes the solar inverter segment of Power-One which was acquired by ABB’s Discrete Automation and Motion division in 2013. The business comes with a comprehensive portfolio of products, systems and services for different types of solar installations. It is currently within ABB’s Electrification department and achieved generated of approximately US$290 million in 2018.
Both companies will ensure a smooth transition for customers and employees. Fimer will honour all existing warranties and ABB will compensate Fimer for taking over the segment and its liabilities.
ABB expects a positive impact
As a result, ABB expects to see an after-tax non-operational burden of approximately US$430 million in the second quarter of 2019 with the half-year results of 2019 being impacted accordingly. Around 75 per cent of this burden is represented by cash flows ABB will pay out to Fimer from the date of closing the deal until 2025. In addition, ABB expects up to US$40 million of administrative and separation costs starting in the second half of 2019.
After closing of the transaction, ABB expects a positive impact on the operational EBITA margin for the Electrification segment of slightly more than 50 base points, supporting the segment’s progress towards its target margin corridor of 15 to 19 per cent. Completion is expected in the first quarter of 2020 and will be subject to certain conditions, including the completion of the separation process and prior consultation with employee representative bodies.
Fimer a very good owner
Tarak Mehta, president of ABB's Electrification department, sais: “The divestment is in line with our strategy of ongoing systematic portfolio management to strengthen competitiveness, focus on quality of revenue and higher-growth segments. Solar is a well-established and key focus for Fimer and as such we believe them to be a very good owner for ABB’s solar inverter segment. The combination of the portfolios under Fimer will support further sales growth. With our range of smart low- and medium-voltage products, ABB will continue to integrate solar power into a range of smart solutions including smart buildings, energy storage and electric vehicle charging.”
Filippo Carzaniga, Chief Executive Officer of Fimer: “We are glad to announce this further step in our development as Fimer’s focus on the solar business will be greatly enhanced by this integration. Our commitment to positively influencing the energy market will be realised through the development of new product platforms and innovative digital technologies. We will continue keep up the good work carried out by ABB in recent years, combining precious resources, knowledge and expertise in Italy and worldwide. With a strengthened portfolio, we are better placed to shape the future of this increasingly strategic segment.” (mfo)
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