Swiss company ABB has signed an agreement to sell its solar inverter business to Italian company Fimer.
The deal between ABB and Fimer is expected to strengthen the future prospects of solar inverter business, while enabling ABB to focus on its business portfolio in other growth markets, the company said.
The transaction is expected to be closed in the first quarter of next year, subject to completion of certain conditions, including the carve-out and prior consultation with employee representative bodies.
The solar inverter business of ABB has a workforce of about 800, spread across in more than 30 countries, with manufacturing and R&D sites located in Italy, India and Finland.
It also includes the solar inverter business from Power-One which was acquired by ABB’s Discrete Automation and Motion division in 2013. The business offers a comprehensive portfolio of products, systems, and services for different types of solar installations. It is presently within ABB’s Electrification business, with revenues of about $290m (£232m), last year.
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. Solar is a well-established and key focus for FIMER and as such we believe them to be a very good owner for ABB’s solar inverter business.
“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.”
The two companies have agreed for a smooth transition for customers and employees. FIMER is expected to honor all the existing warranties and ABB will compensate FIMER for taking the business and its liabilities over.
ABB will take a charge of £344m
For this deal, ABB will take an after-tax non-operational charge of about $430m (£344m) in the second quarter of this year. Nearly 75% of this charge will represent the cash outflows that the company will pay to FIMER, starting from the deal completion date to 2025.
Additionally, the Swiss company also expects up to $40m (£32m) of carve-out related separation costs starting in the second half of this year.
FIMER CEO Filippo Carzaniga said: “We are glad to announce this further step in our development as FIMER’s focus on the solar business will be greatly enhanced by this integration. Our commitment to positively influencing the energy market will be realized through the development of new product platforms and innovative digital technologies.
“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.”
