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Hitachi buys live wire in ABB power deal

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Hitachi buys live wire in ABB power deal

Hitachi buys live wire in ABB power deal

ABB will sell a majority stake in its Power Grids division to Japan's Hitachi and return the proceeds to shareholders, bowing to pressure from an activist investor to sell the business that makes transformers and converters.

As Pascale Davies reports, the acquisition, which values the unit at $11 billion, will see Hitachi become one of the largest players in the power grid industry.

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Hitachi buys live wire in ABB power deal

It's set to become a powerful Japanese Swiss tie up.

Hitachi is buying a 80.01 percent stake of ABB's power grid business- valuing the unit at $11 billion.

For the Swiss company which also makes robots, it's offloading its least profitable division - and will shift its focus to automation.

However, it marks a U-turn for ABB.

Its chief executive two years ago insisted on keeping the business, despite calls from shareholders to sell.

They're likely to be happy now as cash proceeds of up to $7.8 billion from the deal will be returned to shareholders via buybacks or similar means For Hitachi, it's their largest ever acquisition and will help the company achieve its goal to boost its energy and electricity unit's sales.

But some are sceptical about Hitachi's overseas adventures.

The company has only recently recovered from massive losses over the last decade.

It's done so by restructuring it TV panels and hard disc drive businesses.

But some think it would have been better off beefing up its railway and AI interests Its new Swiss purchase, could also be a pricey burden.




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