There was minimal speculation about Joe Hogan stepping down as ABB CEO last year. I speculated that maybe he and his family just didn’t want to live in Switzerland. But maybe it had to do with direction of the company.
ABB has been on a divestiture binge this year. Where it was acquiring companies, it is now divesting them. The company labels it, “Commitment to continuous portfolio optimization.” In the past year, the company has shed five businesses with what it calls “limited synergies” raising about $1 billion.
The power business has been lagging, and the new CEO has moved some talented executives from process automation to that business to give it a boost. Leads me to wonder what might happen there. Or maybe a good chunk of that $1 billion can go into investments in that business to turn it around?
The latest business to hit the block is the Full Service business. The sale is expected to close in the fourth quarter of 2014, subject to regulatory approval. The ABB Full Service business provides fully outsourced industrial maintenance services. ABB Full Service was developed as an adjacent business to ABB’s life-cycle service business and has become a successful stand-alone business unit.
ABB is divesting this business because of limited synergies with ABB’s core portfolio. ABB will continue to supply its standard life-cycle services for the company’s installed base.
“The divestment is fully in line with our strategy to continuously optimize our portfolio. With the agreed sale of our Full Service activities we now have found a new home for five businesses in eleven months that have no substantial synergies with the rest of our portfolio, raising about $ 1 billion,” said ABB CEO, Ulrich Spiesshofer. “The Full Service business will be able to develop further under the ownership of Nordic Capital to the benefit of its customers and employees.”