General Electric's industrial solutions unit is being sold to Zurich-based electrical components maker ABB for $2.6. The deal will shed $200 million in annual costs.
Since 2010, ABB has invested about $11 billion in the US company. The purchase of GE assets will strengthen the company's position in the North American market. It was assumed that GE would gain from $2.5 billion to $3 billion from selling its industrial solutions business.
The funds raised from the deal will go toward funding the company’s reorganization. GE said the industrial solutions deal would probably close this year or in early 2018.
The unit’s sale is poised to be the first major portfolio change under GE’s new chief executive, John Flannery, who has been committed to boost the company’s lagging stock price.
In March 2017, GE agreed to deepen its cost-cut targets under the pressure of shareholder Trian Fund Management. Flannery said he will unveil his plans for GE and the portfolio in November.
