One more piece of General Electric’s once unparalleled power-sector empire is spinning away as the struggling industry giant continues to downsize and try to reduce debt.
Zurich-based ABB has completed its acquisition of GE Industrial Solutions (GEIS) in a deal worth about $2.6 billion. GEIS is the company’s global electrification business.
“We are very pleased to welcome GE Industrial Solutions to ABB,” said ABB CEO Ulrich Spiesshofer in a statement. “The combination reinforces ABB’s position as a worldwide 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 cradle of electrification–a legacy that we will preserve and build on, now that GEIS is part of ABB.”
GEIS will be integrated into ABB’s Electrification Products (EP) division, led by EP President Tarak Mehta, as a new business unit called Electrification Products Industrial Solutions (EPIS). Stephanie Mains, who was previously the President and CEO of the GE Industrial Solutions business, will lead the new business unit as managing director.
As part of the transaction, ABB has established a long-term strategic supply relationship with GE to supply them with products and solutions from across the ABB portfolio. Included in the acquisition is 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 comprehensive combined portfolio, as well as an expanded global footprint, sales force and distribution network,” Mehta said. “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 #2 position in electrification globally and expand our access to the attractive North American market.”
The sale of GEIS comes on the heels of a seemingly unending round of GE divestitures. Last week, GE announced it was selling its distributed power business to private equity firm Advent International for nearly $3.3 billion.
The Boston-based technology firm earlier announced it was selling off its stake in oilfield services company Baker Hughes, which it just bought in an enormous merger four years ago. GE also is selling a portion of its health-care business, as well as other transactions.
GE’s market value has dropped so much that it was removed from the Dow Jones Industrials last month. The company had been part of the elite market list for more than 100 years.