ABB, Swiss-Swedish multinational corporation headquartered in Zurich, Switzerland, is a pioneering technology leader in power grids, electrification products, industrial automation and robotics and motion, serving customers in utilities, industry and transport & infrastructure globally. ABB is traded on the SIX Swiss Exchange in Zürich, Nasdaq Stockholm and the New York Stock Exchange in the United States.

Hitachi Limited, headquarter in Tokyo, Japan is a highly diversified company that operates eleven business segments: Information & Telecommunication Systems, Social Infrastructure, High Functional Materials & Components, Financial Services, Power Systems, Electronic Systems & Equipment, Automotive Systems, Railway & Urban Systems, Digital Media & Consumer Products, Construction Machinery and Other Components & Systems. Hitachi is listed on the Tokyo Stock Exchange and is a constituent of the Nikkei 225 and TOPIX indices.

The Transaction

The relation of ABB & Hitachi formed in 2014, Hitachi & ABB formed a Joint Venture for High Voltage Direct Current operation in the Japanese market. After testing its partner, now ABB announced to hive off its Power Grid Business. Hitachi will acquire ABB’s Power Grid business, for an Enterprise Value of $11 billion for 100% of Power Grids.

ABB-demerger-Power-Grid-Business-Hitachi-1

Hitachi & ABB will set up a Joint Venture in which ABB will spin off its power Grid Business. ABB will initially retain a 19.9% equity stake in the joint venture, allowing a seamless transition. The transaction agreement includes a pre-defined option for ABB to exit the retained 19.9% share, exercisable three years after closing, at fair market value with floor price at 90%of agreed Enterprise Value. Hitachi holds a call option over the remaining 19.9% share at fair market value with floor price at 100% of agreed Enterprise Value.

Power Grid Business

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