ABB to buy out Indian subsidiary for Rs400 crore
11 Mar 2011
Engineering and electricals major ABB Ltd will acquire the operating business of the wholly owned Indian subsidiary of the Swedish group, ABS Global Industries and Services Limited (ABBGISL), for Rs400 crore.
The board of directors of ABB Ltd, at its meeting today, approved the acquisition of the operating businesses of ABBGISL as a going concern on a slump sale basis, the company said in a filing with the Bombay Stock Exchange (BSE).
"This acquisition of operating business of ABBGISL ASB Limited has been made to have business synergies," the company said in its filing.
The transaction involves the acquisition of businesses such as transformer insulation boards and components, low voltage breakers and switches, and vacuum interrupters. These new segments are expected to help ABB earn an additional Rs250 crore a year, the statement said.
The acquisition will take effect on 1 April 2011, it added.
For the quarter ended 31 December, ABB India reported a 94 per cent year-on-year decline in its net profit at Rs6.4 crore. Since June last year, ABB's promoters have increased their stake in the company to 75 per cent from 52.11 per cent.