ABB has completed its acquisition of GE Industrial Solutions (GEIS), GE’s global electrification solutions business. The transaction was announced on September 25, 2017, and is expected to be accretive to operational EPS in the first year.
The $2.6 billion transaction offers substantial value creation potential within ABB, including growth opportunities to be leveraged from coupling ABB’s digital offering, ABB Ability, with the extensive GEIS installed base.
ABB expects to realise approximately $200 million of annual cost synergies in year five.
GEIS will be integrated into ABB’s Electrification Products (EP) division, led by EP President Tarak Mehta, as a new business unit called Electrification Products Industrial Solutions (EPIS).
Stephanie Mains, who was previously the President and CEO of the GE Industrial Solutions business, will lead the new business unit as Managing Director.
As part of the transaction, ABB has established a long-term strategic supply relationship with GE to supply them with products and solutions from across the ABB portfolio. Included in the acquisition is a long-term right to use the GE brand.
“The product portfolios of GE Industrial Solutions and ABB are highly complementary. Together we will have a comprehensive combined portfolio, as well as an expanded global footprint, sales force and distribution network,” said Tarak Mehta.
“Together we will strengthen ABB’s #2 position in electrification globally and expand our access to the attractive North American market.”