Global power solutions company ABB has reached an agreement to sell its solar inverter business to Italian company FIMER.
Completion is expected in the first quarter of 2020 and will be subject to certain conditions, including the completion of a carve-out and prior consultation with employee representative bodies.
As a result of the sale, ABB expects to take an after-tax non-operational charge of approximately $430m (€378m) in the second quarter of 2019 with the half-year results of 2019 being impacted accordingly.
Around 75% of the charge comprises cash outflows ABB will pay to FIMER from the deal closing date through 2025.
In addition, ABB expects up to $40m of carve-out related separation costs starting in the second half of 2019.
ABB’s solar inverter business has approximately 800 employees in more than 30 countries, with manufacturing and research and development sites in Italy, India and Finland.
ABB electrification business president Tarak Mehta said: “The divestment is in line with our strategy of ongoing systematic portfolio management to strengthen competitiveness, focus on quality of revenue and higher growth segments.”
The sale to FIMER also includes the solar inverter business Power-One, which ABB acquired in 2013.
The Power-One business, which provides products, systems, and services for different types of solar installations, achieved revenues of $290m in 2018.
FIMER will honour all existing warranties and ABB will compensate FIMER for taking the business and its liabilities over.
Mehta added: “The combination of the portfolios under FIMER will support further sales growth.
“Through our intelligent low- and medium-voltage offering, ABB will continue to integrate solar power into a range of smart solutions including smart buildings, energy storage and electric vehicle charging.”
FIMER chief executive Filippo Carzaniga said: “We will continue the excellent job carried out by ABB in recent years, combining precious resources, knowledge and expertise in Italy and worldwide.
“With a strengthened portfolio, we are better placed to shape the future of this increasingly strategic business.”