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ABB Divests Remaining Stake in Hitachi Energy Joint Venture

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ABB Ltd has completed its previously announced divestiture of the remaining 19.9% stake in Hitachi Energy joint venture to Hitachi, Ltd. ABB has realized a net positive cash inflow of approximately $1.425 billion in the fourth quarter of 2022 as part of the divestment.

The Hitachi Energy joint venture (formerly Hitachi ABB Power Grids) was formed in 2020 following ABB’s divestment of 80.1% of its Power Grids business to Hitachi. ABB held a pre-defined option to exit the remaining stake by 2023. The call option has an exercise value of $1.679 billion.

The divestment helps ABB focus entirely on industrial customers. The company will be able to focus more on key market trends and customer needs of electrification of transport and industry, automated manufacturing, digital solutions and increased sustainable productivity.


As part of its portfolio management strategy, in October 2022, ABB completed the spin-off of its turbocharging unit, Accelleron. The spin-off helps the company focus on growing global megatrends in electrification and automation. In November 2021, the company divested its Mechanical Power Transmission division (Dodge) for $2.9 billion. ABB used the proceeds to fund organic growth and reward shareholders through share buybacks.

Zacks Rank & Key Picks

ABB presently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks within the broader Industrial Products sector are as follows:

MRC Global Inc. (MRC - Free Report) presently sports a Zacks Rank #1 (Strong Buy). The company pulled off a trailing four-quarter earnings surprise of approximately 103%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.

MRC Global has an estimated earnings growth rate of 325.9% and 37.4% for 2022 and 2023, respectively. Shares of the company have rallied 15.6% in the past six months.

IDEX Corporation (IEX - Free Report) presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 5.7%, on average.

IDEX has an estimated earnings growth rate of 28.4% and 6.1% for 2022 and 2023, respectively. Shares of IEX have gained 25.4% in the past six months.

EnerSys (ENS - Free Report) delivered a trailing four-quarter earnings surprise of 27.1%, on average. ENS presently carries a Zacks Rank of 2.

EnerSys has an estimated earnings growth rate of 7.2% and 26.3% for fiscal 2023 and 2024, respectively. The stock increased 25.6% in the past six months.


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