Renewable Energy

Fimer to Acquire ABB Solar Inverter Business

ABB and the Italian company Fimer S.p.A reported that they signed an agreement for Fimer to acquire ABB’s solar inverter business. The transaction is expected to enhance the prospects of the solar inverter business, and ABB indicated that it will enable it to focus its business portfolio on other growth markets.

ABB’s solar inverter business has about 800 employees in more than 30 countries, with production and R&D facilities located in Italy, Finland, and India. It includes the solar inverter business from Power-One, which ABB’s Discrete Automation and Motion division acquired in 2013.

The solar inverter business offers a comprehensive portfolio of products, systems, and services for various types of solar installations. Currently operating within ABB’s Electrification business, the solar inverter business achieved revenues of about $290 million in 2018.

Both companies intend to ensure a smooth transition for customers and employees. Fimer has agreed to honor all existing warranties, and ABB will compensate Fimer for taking over the business and its liabilities.

As a result, ABB projects an after-tax non-operational charge of about $430 million in the second quarter of 2019 with the half-year results of 2019 impacted accordingly. Cash outflows represent around 75% of this charge. Under the terms of the agreement, ABB will pay compensation to Fimer from the deal closing date through 2025.

In addition, ABB expects to pay up to $40 million of carve-out related separation costs beginning in the second half of 2019.

After closing the transaction, ABB anticipates the operational EBITA margin for the Electrification business to increase by slightly more than 50 basis points, supporting the business’ progress towards its target margin range of 15% to 19%.

Completion of the acquisition is expected in the first quarter of 2020 and will be subject to certain conditions, including the conclusion of the carve-out and prior consultation with employee representative bodies.

“The divestment is in line with our strategy of ongoing systematic portfolio management to strengthen competitiveness, focus on quality of revenue and higher growth segments. Solar is a well-established and key focus for Firmer and as such we believe them to be a very good owner for ABB’s solar inverter business. The combination of the portfolios under Firmer will support further sales growth. Through our intelligent low- and medium-voltage offering, ABB will continue to integrate solar power into a range of smart solutions including smart buildings, energy storage and electric vehicle charging,” Tarak Mehta, President of ABB’s Electrification business, said.

“We are glad to announce this further step in our development as Fimer’s focus on the solar business will be greatly enhanced by this integration. Our commitment to positively influencing the energy market will be realized through the development of new product platforms and innovative digital technologies. We will continue the excellent job carried out by ABB in recent years, combining precious resources, knowledge and expertise in Italy and worldwide. With a strengthened portfolio, we are better placed to shape the future of this increasingly strategic business,” commented Filippo Carzaniga, CEO of Fimer

ABB Group , Fimer S.p.A
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