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ABB says it has completed its acquisition of GE Industrial Solutions (GEIS), GEs global electrification solutions business on June 30, 2018. The transaction was announced on September 25, 2017, and is expected to be accretive to operational EPS in the first year.
The $2.6 billion transaction offers substantial value creation potential within ABB, including growth opportunities to be leveraged from coupling ABBs digital offering, ABB Ability, with the extensive GEIS installed base. ABB expects to realize approximately $200 million of annual cost synergies in year five, which will be key in bringing GEIS to peer performance.
We are very pleased to welcome GE Industrial Solutions to ABB, said ABB CEO Ulrich Spiesshofer. The combination reinforces ABBs position as a worldwide leader in electrification and accelerates our growth and competitiveness in key markets, particularly North America. As one of Thomas Edisons original businesses, GEIS is the cradle of electrification a legacy that we will preserve and build on, now that GEIS is part of ABB.
GEIS will be integrated into ABBs Electrification Products (EP) division, led by EP President Tarak Mehta, as a new business unit called Electrification Products Industrial Solutions (EPIS). Stephanie Mains, who was previously the President and CEO of the GE Industrial Solutions business, will lead the new business unit as Managing Director. As part of the transaction, ABB has established a long-term strategic supply relationship with GE to supply them with products and solutions from across the ABB portfolio. Included in the acquisition is a long-term right to use the GE brand.
The product portfolios of GE Industrial Solutions and ABB are highly complementary. Together we will have a comprehensive combined portfolio, as well as an expanded global footprint, sales force and distribution network, said Tarak Mehta. We are committed to servicing the GEIS installed base and will now be able to provide a more technologically advanced and digitally connected offering to our customers around the world. Together we will strengthen ABBs #2 position in electrification globally and expand our access to the attractive North American market.
