ABB’s (ABBN.S) board will discuss the future of its Power Grids division next week as investors ramp up pressure on the Swedish-Swiss technology group to spin off the $11.6 billion business.
The board will meet at an undisclosed location in Switzerland on Tuesday, said two sources close to the matter.
The main theme will be preparation for ABB’s Capital Markets Day on Oct. 4, where the company is due to give an update on the future of the Power Grids division that was put under review last year.
“The management favours keeping the structure in broad terms, so this means that a sale of the power grids business appears unlikely,” one of the sources said.
It is unclear when ABB will make a decision on what it will do with the business.
Activist investor Cevian has already called for ABB to spin off the Power Grids business, which makes components for offshore wind farms and high-voltage cables and has previously been a drag on the overall performance of ABB.
Another big shareholder, Artisan Partners, has echoed that call, while Nordea — also one of ABB’s 10 largest investors — said the company must come up with convincing reasons to keep the business.
Analysts have said that ABB appears to favor keeping the business and have pointed out its recent improvement in profitability, saying that spinning it off would be unlikely to create value.”As we have said all along, we will give a complete update about our strategic review on Oct. 4 ” ABB spokesman Saswato Das said.
[Source:-Reuters]]
