ABB to sell solar inverter business to Italy's FIMER
09 July 2019
ABB on Sunday announced the signing of an agreement with FIMER SpA of Italy under which FIMER will acquire ABB’s solar inverter business. The transaction will enhance the future prospects of the solar inverter business and will enable ABB to focus its business portfolio on other growth markets, ABB stated in a media release.
Switzerland-headquartered ABB’s solar inverter business has approximately 800 employees in more than 30 countries, with manufacturing and R&D sites located in Italy, India and Finland. It includes the solar inverter business from Power-One which was acquired by ABB’s Discrete Automation and Motion division in 2013.
ABB’s solar inverter business offers a comprehensive portfolio of products, systems, and services for different types of solar installations. It is currently within ABB’s Electrification business and achieved revenues of approximately $290 million in 2018.
Both companies will ensure a smooth transition for customers and employees. FIMER will honour all existing warranties and ABB will compensate FIMER for taking the business and its liabilities over.
As a result, ABB expects to take an after-tax non-operational charge of approximately $430 million in the second quarter of 2019 with the half-year results of 2019 being impacted accordingly. Around 75 per cent of this charge is represented by cash outflows ABB will pay to FIMER from the deal closing date through 2025. In addition, ABB expects up to $40 million of carve-out related separation costs starting in the second half of 2019.
After closing of the transaction, ABB expects the operational EBITA margin for the electrification business to be impacted positively by slightly more than 50 basis points, supporting the business’ progress towards its target margin corridor of 15-19 per cent.
The transaction is expected to be completed in the first quarter of 2020, subject to certain conditions, including the completion of the carve-out and prior consultation with employee representative bodies.
“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,” Tarak Mehta, president of ABB's electrification business, 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,” Filippo Carzaniga, chief executive officer of FIMER, stated.
“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,” he added.
ABB is a pioneering technology leader with a comprehensive offering for digital industries. With a history of innovation spanning more than 130 years, ABB is today a leader in digital industries with four customer-focused, globally leading businesses: Electrification, Industrial Automation, Motion, and Robotics & Discrete Automation, supported by its common ABB Ability digital platform.
ABB’s market leading power grids business will be divested to Hitachi in 2020. ABB operates in more than 100 countries with about 147,000 employees.
FIMER founded in 1942, is active in inverter technology since 1983 and is the world`s eighth largest inverter manufacturer. Its main business is the production of inverters for photovoltaic plants, welding and charging stations for electric vehicles at its operational and integrated plant in Vimercate, Italy.