ABB announced that it completed its acquisition of GE Industrial Solutions (GEIS), GE's global electrification solutions business, on June 30, 2018.
The transaction was announced on September 25, 2017 and is expected to increase operating EPS in the first year.
The $2.6 billion transaction offers substantial value creation potential within ABB, including growth opportunities that can be seized by combining ABB's digital offering, ABB Ability™, with GEIS' extensive installed base. ABB expects to achieve approximately $200 million in annual cost synergies in the fifth year, which will be key for GEIS to achieve the performance of its peers. “We are very pleased to welcome ABB to GE Industrial Solutions,” said ABB CEO Ulrich Spiesshofer. “The combination reinforces ABB's position as a world leader in electrification and accelerates our growth and competitiveness in key markets, particularly North America. As one of Thomas Edison's original businesses, GEIS is the birthplace of electrification, a legacy that we will preserve and build, now that GEIS is part of ABB.”
GEIS will be integrated into ABB's Electrification Products (EP) division, led by PE President Tarak Mehta, as a new business unit called Industrial Electrification Product Solutions (EPIS). Stephanie Mains, who was previously the President and CEO of GE Business Solutions, will lead the new business unit as Chief Executive Officer. As part of the transaction, ABB has established a long-term strategic supply relationship with GE to provide them with products and solutions across the ABB portfolio.
The acquisition includes a long-term right to use the GE brand. “The product portfolios of GE Industrial Solutions and ABB are highly complementary. Together we will have a complete combined portfolio, as well as an expanded global footprint, sales force and distribution network,” said Tarak Mehta. “We are committed to servicing the GEIS installed base and will now be able to provide a more technologically advanced and digitally connected offering to our customers around the world. Together, we will strengthen ABB's No. 2 position in electrification worldwide and expand our access to the attractive North American market.”
