25 Jul 2024

AUTOMATION FOR MANUFACTURING

‘GE restarts talks to sell industrial arm to ABB for over $2bn’

General Electric is reported to have resumed negotiations to sell its Industrial Solutions business to ABB after earlier talks broke down over the value of the business. According to the Reuters news agency, GE is looking to sell the operation – which makes and sells variable-speed drives, circuit-breakers, relays and other industrial electrical equipment – for more than $2bn.

The earlier discussions with ABB ended last month after the Swiss engineering giant rejected the value of more than $3bn that GE initially placed on the controls business.

According to Reuters, GE’s decision to lower its price indicates the determination of John Flannery, who took over as GE’s CEO from Jeffrey Immelt on 1 August, to continue to divest non-core assets.

Another potential bidder, Schneider Electric, is reported to have lost interest in the GE business. Reuters says that this follows Schneider’s $1.25bn acquisition last month of Asco Power Technologies, which makes automatic transfer switches (ATSs), raising potential anti-trust issues if Schneider were to make a bid for the GE Industrial Solutions operation.

GE Industrial Solutions has three divisions: motor and lighting controls (with a portfolio that includes AC and DC drives, contactors, overload relays, pushbuttons, starters and terminal blocks); protection and distribution (motor control centres, circuit-breakers, switchboards, transformers and metering systems); and critical power (automatic transfer switches, surge protection, uninterruptible power supplies and DC power systems).

•  Schneider says that it acquisition of Asco – which had been operating as part of Vertiv (formerly Emerson Network Power) since last December ­– makes it the global market-leader in ATS systems. These systems transfer critical loads automatically from a primary power source to a back-up in the event of a power failure. Asco employs about 2,000 people, mainly in North America, and operates seven manufacturing sites. Asco’s 2016 revenues were $468m, with an Ebitda margin of around 23%. Schneider says that the ATS market offers “attractive long-term growth opportunities”.