ABB To Sell Solar Inverter Business, Sees $430 Mln Charge In Q2; Stock Dips

(RTTNews) - Swiss engineering firm ABB Ltd.(ANN.L, ABB) on Tuesday announced an agreement to sell its solar inverter business to Italian company Fimer SpA.

In the deal, Fimer will honor all existing warranties and ABB will compensate Fimer for taking the business and its liabilities over.

As a result, ABB expects to take an after-tax non-operational charge of approximately $430 million in the second quarter of 2019. Around 75 percent of this charge is represented by cash outflows ABB will pay to Fimer from the deal closing date through 2025.

Further, ABB expects up to $40 million of carve-out related separation costs starting in the second half of 2019.

The deal is expected to close in the first quarter of 2020, subject to certain conditions. With the sale, ABB expects to focus its business portfolio on other growth markets.

ABB's solar inverter business is currently within ABB's Electrification business and achieved revenues of approximately $290 million in 2018. It has approximately 800 employees, and has manufacturing and R&D sites located in Italy, India and Finland.

Following the deal closure, ABB expects the operational EBITA margin for the Electrification business would be impacted positively by slightly more than 50 basis points. This would support the business' progress towards its target margin corridor of 15-19 percent.

In Switzerland, ABB shares were losing around 1.8 percent to trade at 18.72 Swiss francs.