NKT Cables is to acquire ABB’s global high-voltage cable system business for a consideration of €836 m (total enterprise value). The business is part of ABB’s Power Grids division, which is currently undergoing a strategic review.
NKT Cables designs, manufactures and supplies power cables for low-, medium- and high-voltage solutions mainly in the AC product area. It has major production facilities in Europe and China and employs around 3200 people. In 2015, revenue was €1.2 bn euros.
“We are combining two strong cable portfolios rooted in a shared Nordic heritage that will be more competitive on a larger scale under NKT Cables’ ownership, while maintaining access to supply through a long-term strategic partnership,” commmented ABB CEO Ulrich Spiesshofer. “The combination of our niche cable system business with the strength of NKT Cables demonstrates our commitment to active portfolio management, a key element of our Next Level strategy.”
ABB says that its HV cable technology and manufacturing as well as service footprint is highly complementary with NKT Cables’ activities, setting up the combined business to serve the rising global demand for long-distance power transmission cable systems
“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 DC transmission links”, said Claudio Facchin, president of ABB’s Power Grids division. “This transaction will simplify and focus the Power Grids portfolio.”
The transaction is anticipated to close in Q1 2017, subject to regulatory clearances and fulfilment of the closing conditions. Goldman Sachs acted as exclusive financial advisor to ABB and Freshfields Bruckhaus Deringer as legal advisor.
