Canadian Electrical Industry News Week

ABB

September 25, 2017

ABB has announced that it has acquired GE Industrial Solutions, GE’s global electrification solutions business. GE Industrial Solutions has deep customer relationships in more than 100 countries and an established installed base with strong roots in North America, ABB’s biggest market. GE Industrial Solutions is headquartered in Atlanta, Georgia, and has about 13,500 employees around the world. In 2016, GE Industrial Solutions had revenues of approximately $2.7 billion, with an operational EBITDA margin of approximately 8 percent1 and an operational EBITA margin of approximately 6 percent1. ABB will acquire GE Industrial Solutions for $2.6 billion; the transaction will be operationally accretive in year one. ABB expects to realize approximately $200 million of annual cost synergies in year five, which will be key in bringing GE Industrial Solutions to peer performance. As part of the transaction and overall value creation, ABB and GE have agreed to establish a long-term, strategic supply relationship for GE Industrial Solutions products and ABB products that GE sources today.

"This acquisition strengthens our position as partner of choice for electrification globally,  North America and in Canada. We look forward to working with GE Industrial Solutions to create new opportunities in this highly attractive core market for our Electrification Products division.  Our intention is to combine the best of both worlds and make the most of ABB’s technology investment for GE Industrial Solutions’ product pipeline. Together, we will be significantly stronger" said Nathalie Pilon, President, ABB Canada

“With GE Industrial Solutions, we strengthen our Number 2 position in electrification globally and expand our access to the attractive North American market,” said ABB CEO Ulrich Spiesshofer. “Combined with the long-term strategic supply relationship with GE, this transaction creates significant value for our shareholders.”

He added: “Together with the GE Industrial Solutions team, we will execute our well-established plans in a disciplined way to bring this business as part of the global ABB family back to peer performance. With this next step of active portfolio management, we continue to shift ABB’s center of gravity, in line with our Next Level strategy, by strengthening competitiveness, mainly in the North American market, and lowering risk with an early-cycle business.”

“This combination brings together two global businesses with a broad complement of electrical protection and distribution assets,” said John Flannery, CEO of GE. “ABB values our people, domain expertise, and our ability to operate in the segments where we have depth and experience. GE will also benefit through an expanded strategic supply relationship with ABB as the two companies work together.”

GE Industrial Solutions will be integrated into ABB’s Electrification Products (EP) division, resulting in a unique global portfolio and very comprehensive offering for North American and global customers. They will benefit from ABB’s innovative technologies and the ABB AbilityTM digital offering coupled with GE Industrial Solutions’ complementary solutions and market access. Included in the acquisition is a long-term right to use the GE brand. ABB will retain the GE Industrial Solutions management team and build upon its experienced sales force. After closing, this transaction will have an initial dampening effect to EP’s operational EBITA margin. ABB commits to returning EP to its target margin corridor of 15-19 percent during 2020.

Tarak Mehta, President of ABB’s EP division, said: “This acquisition strengthens our position as partner of choice for electrification globally and in North America. We look forward to working with GE Industrial Solutions’ and ABB’s customers and channel partners to create new opportunities in this highly attractive core market for our division. We have a clear integration plan to realize the synergies of this combination and to bring our combined business back into the target margin corridor during 2020.”

ABB’s EP division delivers more than 1.5 million products to customers around the world every day through a global network of channel partners and end-customers. EP offers a comprehensive portfolio of low- and medium-voltage products and solutions for a smarter, more reliable flow of electricity from substation to socket.

Given this transaction, ABB has decided to put the previously announced share buyback program on hold.

The transaction is expected to close in H1 2018, subject to customary regulatory clearances. Credit Suisse and Dyal Co. acted as financial advisors to ABB, and Davis Polk & Wardwell provided legal counsel.

More information

The press release and presentation slides are available on the ABB News Center at www.abb.com/news 

 

EFCElectro‐Federation Canada (EFC) and Cámara Nacional de Manufacturas Eléctricas (CANAME) of Mexico, have submitted joint recommendations to their respective governments to safeguard future trade in North America.

The recommendations call on the strong need for governments to retain, modernize and improve the North American Free Trade Agreement (NAFTA) in order to increase market access, reduce business costs and improve global competitiveness.

Read more: EFC NAFTA Recommendations...

 

CSA

Now in its 24th edition, the 2018 Canadian Electrical Code, Part I includes a number of significant updates and changes to better help electrical workers in the safe maintenance of electrical equipment and create safer electrical installations.

This edition features important revisions to many sections. For example, Section 26 now mandates the use of tamper-resistant receptacles in additional areas where children may be present. Section 62 now requires ground fault circuit interrupter protection for heating devices and controls in proximity to tubs, sinks, and shower stalls. Section 10 has been updated, reorganized, and significantly reduced in length.

 Read more...

 



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