ABB will divest its remaining 19.9% equity stake in the Hitachi Energy joint venture to Hitachi, Ltd.
Hitachi exercised its call option, which was agreed between the parties in December 2018.
The call option’s exercise value is $1.679bn. The companies have agreed to settle remaining obligations relating to the original transaction, and ABB will continue to provide transition services to Hitachi Energy for them to fully separate from ABB’s systems.
ABB does not expect to record any significant gain or loss as a result of the sale. ABB expects net positive cash inflows of approximately $1.425bn upon closing of the sale. The transaction is subject to regulatory approvals and closing is expected to happen in the fourth quarter 2022.
“We are delighted to have agreed on the final part of the transaction earlier than expected and on favourable terms. This will further strengthen our balance sheet and give us additional flexibility in our capital allocation decisions,” said ABB Chief Financial Officer Timo Ihamuotila.