Monday, May 17, 2010

ABB Ltd. buys out stakes in its Indian subsidiary

Swiss-Swedish multinational company, ABB Ltd. announced to increase its stake in its Indian subsidiary. The company is planning to increase its presence in the Indian market. The deal is estimated at $965 million.

ABB is going to offer Rs. 900 per share; a premium of 34% over the closing price of May 14, 2010. Currently, the company holds 52% stake in the ABB India and it wants to increase its stake to 75%.

ABB spokesperson, Thomas Schmidt said, “We continue to look at companies in the smaller and mid-sized segment in our core business areas; it is primarily about strengthening in certain geographies for us, or buying technologies or products to round out our product portfolio," ABB spokesman Thomas Schmidt said.

HSBC Securities and Capital Markets Private Limited will overlook the deal. The process will start on July 8, 2010 and end on July 27, 2010. Payment of shares would take place on August 10, 2010.

Last year, ABB Limited India registered an estimated revenue of $1.4 billion and $117 million in profit before tax. The company employs 6,200 people.

ABB Ltd sells power equipments to utilities and oil and gas companies. Earlier this month, the company also bought Ventyx, a U.S. software company, for more than $1 billion. It is the first one billion dollar acquisition of the company in more than 10 years under the leadership of CEO, Joe Hogan.

Vetyx sells software products to grid operators that would ensure efficient maintenance of energy networks.

At the end of the first quarter, ABB had a cash deposit of $7.1 billion.

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