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The GE Industrial Solutions is headquartered in Atlanta, Georgia, and has about 13,500 employees around the world. In 2016, it had revenues of about $2.7 billion, with an operational EBITDA margin of about 8 per cent and an operational EBITA margin of about 6 per cent.
The company's said: "ABB will acquire GE Industrial Solutions for $2.6 billion; the transaction will be operationally accretive in year one. ABB expects to realise approximately $200 million of annual cost synergies in year five, which will be key in bringing GE Industrial Solutions to peer performance."
As part of the transaction and overall value creation, ABB and GE have agreed to establish a long-term, strategic supply relationship for GE Industrial Solutions products and ABB products that GE sources today, it added.
GE CEO John Flannery said: "This combination brings together two global businesses with a broad complement of electrical protection and distribution assets."
GE will benefit through an expanded strategic supply relationship with ABB, he said.
After closing, this transaction will have an initial dampening effect to EPs operational EBITA margin. ABB commits to returning EP to its target margin corridor of 15-19 per cent during 2020.
ABBs EP division delivers more than 1.5 million products to customers around the world every day through a global network of channel partners and end-customers.
The transaction is expected to close in first half (H1) of 2018, subject to customary regulatory clearances.