Hitachi has completed the merger of its joint venture power business unit with ABB Power Grids, known as Power India, a statement said on Wednesday.
The merger follows the completion of the global merger of the energy business vertical of the Swiss major with the Japanese conglomerate. The merged entity is known as Hitachi ABB Power Grids globally.
While Hitachi owns 80.1 per cent stake in the new joint venture which has a combined business of $ 10 billion, ABB holds the balance, the companies said in a joint statement.
Following this, Hitachi will directly be responsible for the management and operation of Power India or ABB Power Products and Systems India which comprises part of Hitachi ABB Power Grids, and is listed on the BSE and NSE (as Power India).
The merger also involves moving the assets of Asea Brown Boveri’s or ABB’s shareholding in ABB Power Products & Systems India (APPSIL).
ABB Power Products & Systems India was incorporated in February 2019 and was listed in March 2020 and an open offer is underway to buy back its publicly held shares.
The open offer was launched on March 30, 2020. Power India is traded on the exchanges and will continue to be public company post-open offer.
Globally the new behemoth is known as Hitachi ABB Power Grids with $ 10 billion in annual sales, and the new entity began commercial operations, the companies said.
The companies said the merger ensures that the complementary portfolios and technology strengths will enable continuity, enhance customer value and bring growth opportunities.
“In accordance with the agreement signed on December 17, 2018, Hitachi and ABB today completed all required procedures for the formation of Hitachi ABB Power Grids in the 80.1:19.99 joint venture respectively, creating a new global power leader, the statement said, adding the new entity is headquartered in Zurich, Switzerland.
The new entity will have larger scope in areas such as mobility, smart cities, industry, energy storage and data centers, besides providing financial muscle to support ambitious projects and enabling access to Japan, the third largest economy in the world.
Combining our respective technology strengths will bring us new market opportunities and enable us to deliver greater customer value, said N Venu, managing director of Hitachi ABB Power Grids India.
After the global merger, Hitachi acquired indirect control over the power grids business of ABB and, on closing, Hitachi will directly be responsible for the management and operation of APPSIL now.
Last December Hitachi and ABB had agreed to merge at an enterprise value of USS 11 billion. The Japanese major had paid $ 6.85 billion to the Swiss major for 80.1 per cent stake. Hitachi will acquire the remaining 19.9 per cent stake of Hitachi ABB Power Grids to make it a wholly owned subsidiary after 2023.
Source: Business-Standard