Deals & Cases

Homburger advises ABB in its divestment of the power grids business to Hitachi

On December 17, 2018, ABB Ltd announced that it entered into an agreement with Hitachi to divest its power grids business. The transaction will further strengthen ABB’s focus in digital industries.

The transaction values the power grids business at an enterprise value of USD 11 bn. ABB will initially retain 19.9% in the equity of the carved-out power grids business to ensure the transition. For the remaining 19.9%, ABB has a pre-defined exit option at fair market value with a floor price at 90% of the agreed enterprise value, exercisable by ABB three years after closing.

The transaction is expected to be completed by the first half of 2020. ABB intends to return 100% of the estimated net cash proceeds of USD 7.6–7.8 bn from the 80.1% sale to shareholders in an expeditious and efficient manner through a share buyback or similar mechanism.

Homburger advises ABB in this transaction, including with respect to the governance of the joint venture between ABB and Hitachi, the carve-out transactions, the cash return measures and all other Swiss aspects of the transaction. The Homburger team is led by partner Claude Lambert (Corporate / M&A) and includes partners David Oser (Corporate / M&A) and Reto Heuberger (Tax), associates Andreas Müller, Marc Schamaun (both Corporate / M&A) and Marc Vogelsang (Tax) as well as paralegal Maria Braun (Corporate / M&A). Freshfields Bruckhaus Deringer LLP acts as global transaction counsel to ABB.