Industrial automation supplier strengths global position with recent acquisition
ABB, a supplier of robotics, process automation, and electrification components, recently announced its intent to acquire GE Industrial Solutions for $2.6 billion. This follows its recent acquisition of B&R Automation, an industrial software and automation hardware company.
The acquisition of GE Industrial Solutions will begin with its being integrated with ABB’s Electrification Products (EP) division, with an expected cumulative one-time cost for integration and implementation of $400 million. ABB’s Chief Executive Officer Ulrich Spiesshofer and Chief Financial Officer Timo Ihamuotila stated that challenges for GE that include an aging portfolio, a declining share of the US market, and a below-peer margin.
CEO Ulrich Spiesshofer stated that the GE Industrial Solution portfolio will be leveraged and will bring in ABB’s technology. ABB plans to provide a digitalized portfolio to address the issue of an aging one The decision to update this portfolio is important, coming at a time when Industrie 4.0/IIoT is maturing in the industrial automation market.
An advantage of this acquisition is that GE Industrial Solutions will further expand ABB’s electrification business, especially in the switchgear market. ABB is already one of the leading global suppliers for air circuit breakers (ACB), medium-voltage control centres (MVCCs), miniature circuit breakers (MCBs), molded-case circuit breakers (MCCBs), residual circuit devices (RCDs), soft starters (LV and MS SS), and low-voltage contactors. IHS Markit switchgear market research points to this acquisition strengthening ABB’s positioning in the switchgear market across the product portfolio; Figure 1 shows the gain in market share for five switchgear products.
Overall, specifically for the switchgear market, IHS Markit estimates that ABB was behind Siemens and just slightly ahead of Eaton on global market share. The acquisition of GE Industrial Automation will increase ABB’s market shares and will give them an increased presence in the North American market.
Susanne Cumberland, analyst, manufacturing technology at IHS Markit, a CFE Media content partner. Edited by Chris Vavra, production editor, Control Engineering, CFE Media, firstname.lastname@example.org.
See more information about the acquisition linked below.