ABB to exit three divisions with revenues of $1.75 billion

ZURICH (Reuters) – ABB plans to offload three business units that generate $1.75 billion in sales, the Swiss engineering company said on Thursday, equivalent to 6% of its annual revenue.

The company said it was “exploring all options” to exit turbocharging, mechanical power and power conversion, the company said ahead of its first investor day under Chief Executive Bjorn Rosengren.

ABB, whose products range from electric ship motors to factory robots, has been carrying out a review of its operations since Rosengren took over in March. The former Sandvik boss has said ABB has been weighed down by a business model that was too complicated.

Earlier this year it completed the sale of its power grids business to Hitachi <6501.T>, and said it would return cash proceeds of $7.6 billion to $7.8 billion to investors.

Rosengren said all three business units were “high quality” with profit margins above the group margin corridor of 14 to 16%. Among the options being explored are complete sales or spin offs.

“In this process, we will seek the best value-accretive solution for ABB and those businesses and not put ourselves under time pressure,” said Rosengren, adding portfolio reviews would remain in place.

(Reporting by John Revill, editing by Silke Koltrowitz)