ABB India buys ABS Global Industries for Rs 400 cr

Acquired business to generate additional annual revenue of Rs 250 cr.

ABB Limited, the Indian arm of the global power and automation major, has announced it is acquiring the operating business of ABS Global Industries and Services Limited (ABBGISL) for Rs 400 crore.

ABBGISL is a wholly-owned Indian subsidiary of the ABB Group of Zurich and is being executed as a slump sale. ABB India said the move is more of an internal transfer from ABB Group to ABB India. The objective of the acquisition is to strengthen and align businesses, a spokesperson said.

According to a statement from ABB India, the businesses, which are proposed to be acquired are transformer insulation, boards and components, LV breakers and switches and vacuum interrupters. Together, these are expected to generate additional revenue of approximately Rs 250 crore on a full-year basis. The effective date of the acquisition is fixed at April 1.

 

This is the second acquisition within a period of around six months that ABB India is effecting, in an effort to come out of a bad patch in India operation. The company, during September 2010, acquired Bangalore-based Metsys Engineering and Consultancy, which is one of the key technical solution providers to the steel industry in India and other emerging market countries. Metsys employees and R&D capabilities will be integrated into ABB’s Process Automation division.

ABB India posted a sharp dip of close to 94 per cent in net profit to Rs 6.8 crore for the quarter ended December, compared to Rs 109.6 crore in the same quarter last year. Total income for the quarter increased by nine per cent to Rs 2,074.6 crore compared to Rs 1,906.8 crore in the same quarter last year.

In a recent interview with Business Standard, ABB India managing director Bazmi Husain had indicated they will be constantly looking at acquisitions to improve the range of offerings in India. The company, during the past year, has been facing intense competition in the Indian market from Chinese and Korean vendors even as it started to pull back from the rural electrification business, which is taking a heavy toll. The company has stated that a majority of the moves to put Indian operations back on the growth path had been taken and “things will improve during 2011”.