ABB Is Said to Explore Sale of Dodge Unit Amid CEO Review
(Bloomberg) -- ABB Ltd, the Swiss industrials giant, is considering a sale of its North American mechanical power transmission business Dodge, according to people familiar with the matter.
The company’s new chief executive officer, Bjoern Rosengren, may announce the potential disposal plans during its investor day on Thursday, said the people, who asked not to be identified because the discussions are private. He could also earmark some smaller divestments, they said.
The decision is one of the first, hotly awaited strategic moves by Rosengren, who joined from Sandvik AB in March. As part of his review of ABB’s sprawling portfolio that spans automation products, robotics and power systems, the Swede looked to jettison businesses that had lower synergies, profitability and growth.
ABB, which has a market valuation of about 55 billion Swiss francs ($60 billion), bought Dodge, whose products include mounted bearings, enclosed gearing, couplings, sheaves, and bushings for industrial purposes, as part of its $4 billion purchase of Baldor Electric Company in 2011. The Baldor brand was retired in 2018.
ABB has already received preliminary interest for the Dodge business from potential suitors, the people said. No final decision has been made and it could opt to pursue other divestments, they said.
A spokesman for ABB declined to comment.
The company in 2019 started exploring the sale of its power-conversion unit that helps telecommunications and technology companies run infrastructure and use energy more efficiently, people familiar with the matter said at the time. That process was put on ice amid the coronavirus pandemic, but could be revived, the people said this week.
The turbochargers unit is another potential divestment because it doesn’t fit with rest of the business, according to analysts.
The Swiss company is increasingly focusing on electrification, robotics and automation, and agreed in 2018 to sell a majority stake in its power grid business to Hitachi Ltd. as part of the transformation.
ABB traces its origins back to companies founded in the late 19th century including an electric light manufacturer in Sweden and electrical engineer in Switzerland.
©2020 Bloomberg L.P.