LONDON, UK / ACCESSWIRE / September 27, 2017 / Pro-Trader Daily looks at the latest corporate events and news making the headlines for ABB Ltd (NYSE: ABB), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=ABB. The Company announced on September 25, 2017, the acquisition of GE Industrial Solutions, a subsidiary of General Electric Co (NYSE: GE). GE Industrial Solutions is headquartered in Atlanta, Georgia, and has about 13,500 employees around the world. The subsidiary had revenues of $2.7 billion and operational earnings before interest, tax, depreciation, and amortization (EBITDA) margin of about 8%. ABB has agreed to acquire GE Industrial Solutions for $2.6 billion, where the transaction will be operationally accretive in year one. For immediate access to our complimentary reports, including today's coverage, register for free now at:
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ABB views this acquisition as a step to strengthen its position in electrification globally and expand the access to the North American market. ABB and General Electric have agreed to establish a long-term, strategic supply relationship for GE Industrial Solutions products and ABB products that General Electric sources currently. Through this relationship, the transaction is set to create significant value for ABB's shareholders, according to the Company. ABB expects to realize about $200 million of annual cost synergies in year five, which would be crucial in bringing GE Industrial Solutions to peer performance.
GE Industrial Solutions will be integrated into ABB's Electrification Products (“EP”) division, resulting in a unique global portfolio and comprehensive offering for North America and global customers. The joint venture is set to benefit from ABB's innovative technologies and the ABB Ability digital offering, coupled with GE Industrial's complementary solutions and market access. ABB has agreed to retain the management team and build upon the experienced sales force. Post the close of the transaction, there will be an initial minor decline in EP's operational EBITA margin.
ABB's EP division delivers more than 1.5 million products to customers around the world each day, through a global network of channel partners and end-customers. EP offers a comprehensive portfolio of low- and medium-voltage products and solutions for a reliable flow of electricity from the substation to socket. Post this transaction, ABB has agreed to put the share buyback program on hold. The transaction is expected to close in H1 2018, subject to customary regulatory clearances.
Company Growth Prospects
On September 20, 2017, ABB received another major order from energy supplier EnBW for the expansion of the charging column network on German motorways. By the end of 2017, ABB will have delivered an additional 117 rapid-charging columns at the locations of service station operator Tank & Rast. The latest generation of charging columns is connected to the Internet via a cloud solution, enabling cashless payments among other things. In 2016, EnBW awarded an order to ABB for 68 rapid-charging stations with a high-charging capacity of 50 kW. With this order, ABB further expanded its market-leading position in the charging infrastructure for electric mobility in Germany.
Last Close Stock Review
On Tuesday, September 26, 2017, the stock closed the trading session at $24.56, marginally down 0.37% from its previous closing price of $24.65. A total volume of 955.71 thousand shares have exchanged hands. ABB Ltd's stock price advanced 5.36% in the last one month, 4.78% in the past six months, and 9.16% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have surged 16.56%. The stock is trading at a PE ratio of 23.68 and has a dividend yield of 3.09%. The stock currently has a market cap of $53.25 billion.
General Electric's share price finished yesterday's trading session at $24.93, slightly falling 0.72%. A total volume of 38.53 million shares have exchanged hands, which was higher than the 3-month average volume of 38.50 million shares. The Company's stock price advanced 1.80% in the last one month. Shares of the Company have a PE ratio of 28.59 and have a dividend yield of 3.85%. The stock currently has a market cap of $216.17 billion.
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