This sale is just as good as a spinoff

Article Excerpt

European industrial conglomerate ABB has opted to sell its struggling power grid business instead of spinning it off. That will nonetheless unlock value and let the company continue to reward investors. ABB LTD. ADRs $26 is a buy. The company (New York symbol ABB; Manufacturing & Industry sector; ADRs outstanding: 2.1 billion; Market cap: $54.6 billion; Dividend yield: 3.2%; Takeover Target Rating: Medium; www.abb.com) took its present form in 1988 through the merger of Sweden’s Asea AB and Switzerland’s BBC Brown Boveri AG. Asea (formed in 1883) introduced electricity into Sweden, and developed its railway network. Brown Boveri (formed in 1891) specialized in power generation and turbines. ABB is a major Swiss-based provider of power technologies for utilities. These include transformers, transmission systems and other power industry apparatus such as voltage switch gears and circuit breakers. The company also makes automation systems and robotics that help increase plant productivity and reduce power consumption in a wide variety of industries. As a result of pressure from activist investor…

You are trying to access subscriber-only content.

To read this article, you may subscribe or sign in.
If you are already a subscriber, log in here.

If you wish to become a subscriber, click here. Or you may enjoy access to all our publications when you become a Member of Pat McKeough's Inner Circle Pro.