ABB’s retreat from solar inverters to cost firm US$470m

ABB has accepted it needs to cough up hundreds of millions to part ways with the solar inverter market, a segment it sees as under pressure from declining revenues and low Chinese prices. The Zurich-headquartered group said it will pay up to US$470 million in return for offloading its solar inverter unit to FIMER, an Italian group that also manufactures the devices. The deal will see ABB take a US$430 million charge – 75% of which FIMER will receive between the deal completion point and 2025 – and a further US$40 million in carve-out costs. The transaction, expected to be complete in Q1 2020, sees ABB pass on a solar inverter unit employing 800 people across 30 countries. With manufacturing and research sites in Italy, India and Finland, the unit is part of ABB’s Electrification division and posted around US$290 million in revenues in 2018. Contacted by PV Tech, ABB spokesperson Daniel Smith declined to shed light on the unit’s profitability, describing it however as a “drag” for the margins of the broader Electrification division. “The benefits of the positive margin impact [from divesting the solar inverter unit] outweigh the negative effect of the charge,” the spokesperson indicated.