Hitachi Ltd.’s takeover of ABB Ltd.’s power grid division for about $6.4 billion would be the Japanese conglomerate’s biggest-ever deal as it shifts focus from nuclear plants to the higher-growth market for electricity networks.
Hitachi agreed to acquire 80.1 percent of a business with an enterprise value including net debt of $11 billion, it said in a statement Monday. ABB will keep the remaining stake and plans to return as much as $7.8 billion to investors through a buyback or other measures.
The move will advance Hitachi Chief Executive Officer Toshiaki Higashihara’s efforts to overhaul the diversified company and become a top provider of grid equipment as prospects for nuclear power are increasingly uncertain. The ABB division makes transformers, long distance electricity-transmission systems and energy storage units. Its sale will leave the Swiss engineering giant more concentrated on robotics and automation.