Power and automation technology company ABB (VTX:ABBN) said today it is selling its global high-voltage cable system business to NKT Cables in a deal with an enterprise value of EUR 836 million (USD 932m).
The enlarged cable business operated by NKT will have a solid foothold in both the growing offshore wind industry and for the development of the interconnector grid in Europe, the buyer said separately.
ABB HV Cables provides design, engineering, supply, installation, commissioning and service. It has a workforce of about 900 people and includes manufacturing and research and development (R&D) capabilities for high-voltage submarine and underground cables in Karlskrona, Sweden. The business generated USD 524 million in adjusted standalone revenues last year.
The operations being acquired by NKT Cables are “highly complementary” with its own activities. The company designs, produces and supplies power cables for low-, medium- and high-voltage solutions mainly in the Alternating Current (AC)-area. On the other hand, ABB HV Cables is well positioned in Direct Current (DC) high-voltage power cables, which is a new market for the buyer and it recognises strong growth potential in it.
“As part of the strategic partnership, ABB and NKT Cables will work together on future projects to access market opportunities in areas like sub-sea interconnections and Direct Current (DC) transmission links,” said Claudio Facchin, president of ABB’s Power Grids division.
The transaction is expected to be wrapped up in the first quarter of 2017, subject to regulatory clearances. It includes the transfer of a new cable-laying vessel that is currently being built.
Also today, NKT Cables' parent, Denmark-based NKT Holding A/S (CPH:NKT), said that it plans to split the holding company into two separately listed firms following the ABB transaction. Each separate business, namely NKT Cables and Nilfisk, will focuse on its own respective industry -- power cable supply and professional cleaning equipment.
(EUR 1.0 = USD 1.116)
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Extruded HVAC cable systems. Photo: ABB
