ABB soaks up California solar energy specialist

Swiss-Swedish engineering giant ABB says it is acquiring the California company Power One, which specializes in renewable energy such as solar, for $1 billion.

ABB soaks up California solar energy specialist
Photo: Roland Zh

The transaction, which has been approved by the US company's board, should wrap up during the second quarter, ABB said in a statement issued on Monday.
The engineering giant said it would pay $6.35 per share in cash, or a total 
of $1.028 billion, but stressed that the deal would also allow it to absorb Power One's $266 million cash holdings.
Based in Camarillo, north of Los Angeles, Power One is a leading maker of 
solar photovoltaic inverters, used to transform the energy captured by solar panels into electrical power.
Power One, which last year raked in sales of around $1.0 billion, employs 
some 3,300 people, including in China, the United States, Italy and Slovakia.
"Solar PV is becoming a major force reshaping the future energy mix," ABB 
chief executive Joe Hogan said in the statement.
He maintained that with its acquisition of Power One, his company would 
become "a global player" in the sector, which is expected to balloon by 10 percent each year until 2021, according to the International Energy Agency.
Following the news, ABB shares jumped 1.1 percent to 20.15 Swiss francs in 
late-morning trading on the Swiss stock exchange, while the SMI index was up 0.67 percent.
Sarasin Bank analyst Martin Schwab said the price of the acquisition seemed 
a bit high, offering Power One a premium of 57 percent on its closing price Friday, but felt that the deal could pay off in the future.
"In light of the currently fierce competition in the solar market, the 
acquisition is more of a strategic move to secure ABB's technology exposure to smart grids applications," he said in a research note.

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ABB to slash ‘white-collar’ jobs to cut costs

Swiss-based engineering giant ABB is slashing office jobs to cut spending by $1 billion by the end of 2017 as part of a plan announced on Wednesday.

ABB to slash 'white-collar' jobs to cut costs
ABB headquarters in Zurich. Photo: ABB

The power and automation technologies company did not disclose how many jobs would be cut through what it called “white-collar productivity savings”.

The measure was included in the second stage of a restructuring plan which aims to free up $2 billion in cash and to enable the company to “become more active in value-creating acquisitions”.

The company is reducing the number of its divisions from five to four,  combining power and automation into a single unit dedicated to power grids.

“The actions we are announcing today will deliver additional value in a more focused way to customers through our unique power and automation offering,” CEO Ulrich Spiesshofer said in a statement.

“At the same time, we will become leaner, faster and more agile,” Spiesshofer said.

“This will drive the shift of our centre of gravity towards higher growth, greater competitiveness and lower risk,” he said.

“With these actions, we address the rapidly changing market conditions and face the increased uncertainty in the world.”

ABB said it was targeting annual revenue growth of three to six percent, lower than earlier targets but “aligned to new market realities”.

The company said it would continue a share buyback program as part of its strategy.

Spiesshofer announced the first phase of restructuring a year ago, stressing a plan to grow the company’s business through acquisitions and partnerships.