ABB to exit three divisions with $1.75 billion in revenue1 min read . Updated: 19 Nov 2020, 01:56 PM IST
- The Zurich-based company will explore options for Turbocharging, Mechanical Power Transmission and Power Conversion, ABB said in a statement
ABB Ltd. is looking to exit three divisions with combined revenue of $1.75 billion as part of Chief Executive Officer Bjoern Rosengren’s plan to boost the Swiss engineer’s profitability.
The Zurich-based company will explore options for Turbocharging, Mechanical Power Transmission and Power Conversion, ABB said in a statement ahead of an investor event Thursday.
“We will seek the best value-accretive solution for ABB and those businesses and not put ourselves under time pressure," said Rosengren. “Furthermore, portfolio reviews will continue to be a key element of the ABB Way."
Investors have been long awaiting today’s announcement amid hopes that Rosengren will tackle ABB’s conglomerate structure to improve profit and lift the stock price. Since taking the helm in March, the 61-year-old Swede has handed more responsibility to divisions heads, drawing on a rich track-record of successfully turning-around companies like Sandvik AB.
ABB has for years been under pressure from several anchor investors, including activist Cevian Capital, to slim down its complex structure. Almost two years ago, it announced the sale of its Power Grids unit to Hitachi Ltd., and it earlier this year pledged to return proceeds to investors via a maximum $7.8 billion buyback program.
Shares in ABB are up 8.3% since the beginning of the year, outperforming the European STOXX 600 Industrial Goods & Services index, which is up 1.3% year-to-date.
Bloomberg News reported yesterday that ABB was exploring a sale of its mechanical power transmission business and could revive a process to sell its power-conversion unit.
ABB is expected to report group revenues of about $26 billion for full year 2020, according to analysts surveyed by Bloomberg.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.