ABB open to ‘more than one’ big deal in renewed M&A drive, chairman says
ABB, which has a market capitalization of 125 billion Swiss francs ($159 billion), is considering acquisitions of up to a few hundred million dollars but is ready to “step in” on larger deals for the right target, Voser said.
“If you look at our balance sheet, the cash flow we generate every year and the $5 billion coming from robotics investment, we could also do multiple big deals,” Voser said in an interview at ABB’s Zurich headquarters.
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The comments point to a more aggressive acquisition focus from ABB after years of selloffs, including last year’s robotics division deal with SoftBank.
Voser declined to comment on reports that ABB was considering a bid for French electrical equipment maker Legrand; this was a transaction that would be the Swiss group’s largest transaction to date. Legrand’s market value is around $43 billion.
“ABB has never done a deal this big, but generally speaking, I wouldn’t completely rule out a deal of this size in the future,” Voser said. But he added that deals closer to the record $4.2 billion acquisition of engine maker Baldor were more likely.
Increasing Growth through Mergers and Acquisitions
ABB, a rival to Siemens and Schneider Electric, has recently focused on increasing profit margins and offloading businesses beyond electrification products used in areas such as data centers and automation.
Voser said future deals will focus on electrification, mobility and automation, and that the company is “in constant negotiations” on smaller transactions, while larger deals remain an active topic at the board and executive committee level.
“We want to grow organically at an average of 5-7% per year, but we have the desire to grow further and that will come through mergers and acquisitions,” he said, referring to sales.
MIDDLE EAST CRISIS MAY HIT GLOBAL DEMAND
While ABB has so far seen no major negative impact from the Middle East conflict, which began on the last day of February, Voser, the former CEO of energy firm Shell, warned that the crisis risks dealing an energy blow to the global economy and could damage demand and investment if it continues.
“The longer it goes on, the more the global economy will suffer; you will have energy shortages, prices will rise and that should have a direct impact on demand,” he said.
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Even if the conflict ends soon, restarting complex energy systems will take time, Voser said.
“Restarting a refinery is not a one-day show; it will take a month or two for the entire global energy supply system to be fully operational again,” he said.
Still, the executive, who is a member of the IBM board of directors, remained optimistic about demand driven by the excitement of data centers supporting AI workloads, a leading driver of growth.
But he warned that some debt-financed AI companies may not be able to survive without revenue and could potentially create credit stress, especially in the US.
The 67-year-old executive, who has been chairman of ABB since 2015, signaled that the board will be renewed starting next year, paving the way for his potential departure when he turns 70 in 2028.
“We are planning to make some changes to the board and at a certain stage my time will come,” he said.
