Integration of GE Industrial Solutions
On June 30, 2018, ABB completed its acquisition of GE Industrial Solutions, GE’s global electrification solutions business.
With this $2.6 billion acquisition, ABB reinforced its #2 global market position in electrification, paving the way for accelerated growth and competitiveness in key markets, particularly in North America. Industrial Solutions is now part of ABB’s Electrification business. Its rapid integration is enhancing customer value and expanding the business’ extensive portfolio of low- and medium-voltage products, solutions and services from substation to socket.
Industrial Solutions has a long and impressive history, dating back to the time when Thomas Edison patented the world’s first circuit breaker. Headquartered today in Atlanta, Georgia, the business unit has brought approximately 14,000 new employees to ABB, along with their strong customer relationships in more than 100 countries. Industrial Solutions’ large installed base and extensive distribution networks, especially in the U.S.A. – ABB’s largest market – are significantly expanding the reach and impact of ABB’s electrification offering.
The ongoing integration efforts are well on the way to aligning teams and operations with the activities of the Electrification business. ABB expects to realize approximately $200 million in annual cost synergies by 2022, bringing the performance of the unit into line with its global peers.
The Industrial Solutions acquisition offers substantial value creation potential within ABB, including growth opportunities that can be leveraged by coupling ABB’s digital offering, ABB Ability™, with Industrial Solutions’ extensive installed base. By bringing together the best parts of two outstanding electrification portfolios, the integration will deliver a comprehensive, technologically advanced, digitally connected offering to customers globally. Pairing ABB’s innovative technologies with Industrial Solutions’ complementary solutions and market access substantially expands ABB’s global footprint and strengthens its sales force and distribution network.
As part of the transaction, ABB has established a long-term strategic supply relationship to provide General Electric with products and solutions not just from Industrial Solutions, but also from across ABB’s portfolio. The acquisition includes a long-term right to retain use of the GE brand on the business unit’s products.
Today, ABB’s Electrification business has strong exposure to a range of rapidly growing customer segments, including renewables, e-mobility, data centers and smart buildings. Its total addressable market is worth $160 billion and is forecast to grow on average by 3 percent per annum over the long term.