Hitachi, which announced in December 2018 it would acquire ABB’s power grids business, expects to complete the purchase in the first half of 2020. Hitachi will acquire an 80.1% stake in the power grids business, making it a consolidated subsidiary. Hitachi has entered into a purchase option to acquire the remaining 19.9% stake, making Power Grids a wholly-owned subsidiary eventually.
As a result of this agreement, Hitachi will offer innovative energy solutions globally by combining ABB’s world-class offerings, including advanced digital grid solutions, with Hitachi’s digital technology. In addition, Hitachi aims to build an energy platform that connects various fields such as mobility, life and industry.
The power grids market is rapidly expanding, driven by increasing adoption of renewable energy, rising energy demand and supply in emerging countries, the expansion of distributed power sources, deregulation of the electric power sector and advances in electric power system reform.
ABB’s power grids business operates four segments, all of which are global market leaders:
- Grid Automation
- Grid Integration
- High Voltage Products
With the acquisition of the ABB power grids business, Hitachi will expand not only in the power and energy area, but also in areas such as mobility (railways and EVs), life (smart-city and buildings) and industry (manufacturing facilities) and at providing a wide range of customers with innovative energy solutions.
Hitachi and ABB agreed to the enterprise value of the Power Grids business at $11 billion. The 80.1% stake is expected to be approximately $6.4 billion after deducting debt. The final price will be determined after customary adjustments for net working capital and net debt based on the actual amounts at the closing date.
News item from Hitachi