Swiss-Swedish engineering giant ABB group President and CEO Designate Fred Kindle speaks at a press conference in Bangalore 22 November 2004. Kindle, stating that India was the country with the fastest growing operations within the ABB group, announced that his company, which two years ago opened its first research and development center outside Europe and the United States in Bangalore and currently employs about 100 engineers there, will employ another 500 professionals over the next couple of years. The Bangalore center develops engineering solutions and support automation activities across the ABB group.
International companies continue to invest in the US energy sector, with Swiss-based ABB picking up electrical components firm Thomas & Betts for $3.9 billion today, bringing its total business in North America to a total of $10 billion and keeping it the single largest market in the world for the European company.
The acquisition is part of a concentrated effort to expand the company’s presence in the Americas in recent years, and the agreement to fold the Memphis-based firm into its global business portfolio represents a way to complement existing ABB businesses, the Swiss firm’s North American CEO Enrique Santacana told reporters today. “This acquisition is all about growth, there are very minor existing overlaps,” he said.
The low-voltage components Thomas & Betts makes – and markets through its roughly 6,000 distributor locations – are included in the electric grid but are not part of the company’s smart grid strategy, Santacana told Breaking Energy. ABB Mediterranean region president Barbara Frei discussed the firm’s smart grid strategy in Europe as part of a broader discussion with Breaking Energy here.
ABB is financing the transaction with a $4 billion bridge financing commitment from Bank of America Merrill Lynch, which is expects to pay back through both cash and debt issuance. Roughly $200 worth of cost-saving synergies will be in place by 2016, the majority in sourcing and purchasing efficiencies. The firms expect the deal to be accretive within the first year after it closes, excluding one-time charges and implementation costs.