ParticularsĬonsidering the growth opportunities available in India, ABB India trades at significant premium to the multiple its global arm is getting. If they decide to transfer the Indian business through Slump Exchange and all the net proceeds they distribute to the shareholders in the form of dividend, after considering the tax, per equity share is likely to be around INR 125 -150. Table 4: Global Power Grid Valuation ParticularsĮBITA Share of Indian Grid business in Global Grid BusinessĮxpected Valuation of Indian Grid BusinessĪssuming Indian Power Grid Business will get the same multiple which Global Power Grid Business got, the expected valuation of India Power Grid Business will be around circa ₹3900 crores. Table 3: Growth Y-o-Y for 9months Sep18 vs Sep 17 Particulars Growth across the Indian segments for the 9-months ended on 30 th September 2018 compared with the 9 months ended on Table 2: Order Book of India Business (%) Particulars The segment has a health order book and almost 40% of the entity’s revenue is through Power Grid Business. Indian operation is very much dominated by the Power Grid Business. Table 1:Revenue & EBIDTA Share (All figs in $Million) Year Global Revenue Share of Power Grid Business The latest results (Q3 2018) are at the target margin corridor, having more than doubled margins. Since 2014, Power Grids has been significantly improved under the ownership of ABB. It accounts for about a quarter of ABB’s current business. Power Grid BusinessĪBB’s Power Grids unit makes power transformers, long-distance transmission systems for power and also designs energy storage units. Hitachi will get global customer base through which it can expand its energy solution business. Furthermore, by building an energy platform to realize more efficient use of electricity throughout society, Hitachi aim at expanding its Social innovative Business not only in Power & Energy area, but also in the areas such as mobility, life & Industry. With the acquisition of the ABB power grid business, Hitachi will offer innovative energy solution business globally by combining ABB’s world-leading grid solutions & products with Hitachi’s digital technology. The transaction is expected to close by first half of 2020. The joint venture will be headquartered in Switzerland, with Hitachi retaining the management team to ensure business continuity. Hitachi will fund the acquisition through internal accruals plus borrowings. Hitachi holds a call option over the remaining 19.9% share at fair market value with floor price at 100% of agreed Enterprise Value. The transaction agreement includes a pre-defined option for ABB to exit the retained 19.9% share, exercisable three years after closing, at fair market value with floor price at 90%of agreed Enterprise Value.

ABB will initially retain a 19.9% equity stake in the joint venture, allowing a seamless transition. Hitachi & ABB will set up a Joint Venture in which ABB will spin off its power Grid Business. Hitachi will acquire ABB’s Power Grid business, for an Enterprise Value of $11 billion for 100% of Power Grids. After testing its partner, now ABB announced to hive off its Power Grid Business. The relation of ABB & Hitachi formed in 2014, Hitachi & ABB formed a Joint Venture for High Voltage Direct Current operation in the Japanese market. Hitachi will acquire ABB’s Power Grid business, for an Enterprise Value of $11 billion.

Hitachi acquires abb power grids