By Akanimo Sampson
Hitachi and ABB have completed the formation of Hitachi ABB Power Grids, a joint venture between the two companies.
Hitachi has an 80.1% stake in this new joint venture, which has business volume of approximately $10 billion, and ABB holds the balance.
Executive Vice President of Hitachi, Toshikazu Nishino, is the chairman of the new entity and Claudio Facchin the CEO. The new entity is headquartered in Zurich, Switzerland, and the current management team will ensure business continuity.
“Hitachi’s leading digital technologies merged with world-class power grid solutions will help us to play an active role in the global transformation and decarbonisation of energy systems for a sustainable energy future. Intelligent solutions for a more dynamic grid will also contribute to the UN’s Sustainable Development Goal 7 of ‘affordable, reliable and clean energy’,” said Nishino.
The deal is part of ABB’s plan to simplify the organisation and become “more customer-focused,” according to Peter Voser, chairman of ABB.
“ABB remains committed to using net cash proceeds from the transaction for a share buyback program,” he added. “Our goal is to execute this in an efficient and responsible way, taking account of the prevailing circumstances.”
The joint venture is expected to facilitate expansion opportunities in areas such as mobility, smart cities, industry, energy storage and data centers, besides providing financial muscle to support ambitious projects and enabling access to Japan, the third largest economy in the world.
“Synergies and access to new and growing markets provided by Hitachi will help take Power Grids to the next stage of its development, further strengthening its leading position,” said Timo Ihamuotila, CFO of ABB and Director of the Board of Hitachi ABB Power Grids.
“Hitachi brings long-term commitment to the new entity and strengthens the existing business partnership between our companies”, he added.
“Combining our respective technology strengths will bring us new market opportunities and enable us to deliver greater customer value,” said Claudio Facchin, CEO, Hitachi ABB Power Grids.
“We remain committed to powering good for a sustainable energy future, with pioneering and digital technologies, as the partner of choice for enabling a stronger, smarter and greener grid.”
