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ABB To Sell Power Grids Division To Hitachi In USD 11 Billion Deal

ABB will initially retain 19.9 percent of Power Grids, the company said, with the deal including an exit option at fair market value with a floor price set at 90 percent of the enterprise value, exercisable by ABB three years after closing

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ABB will sell 80.1 percent of its Power Grids division to Japan’s Hitachi, the Swiss engineering group said on Monday, adding it would return net cash proceeds of $7.6-7.8 billion from the deal to shareholders. 

The Zurich-based company, which said the transaction put the Power Grids business’s enterprise value at $11 billion, also said on Monday it would be modifying the structure of its remaining businesses.

That reshuffle will result in roughly $500 million annual run-rate cost reductions following $500 million in restructuring charges.

ABB will initially retain 19.9 percent of Power Grids, the company said, with the deal including an exit option at fair market value with a floor price set at 90 percent of the enterprise value, exercisable by ABB three years after closing.


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