General Electric has agreed to a deal that could reshape the American electronics market down the line. Business Insider reports that “the power-grids maker ABB is buying General Electric’s Industrial Solutions business for $2.6 billion in a bet it can improve the division’s lackluster margins over the next five years.” The deal also comes with provisions that would allow ABB to use GE branding.
The move is something of a gamble but could also reap huge rewards for the Zurich based company. “ABB is seeking to better penetrate the North American market and gain access to GE’s larger installed base of electrical installations worldwide.” The move is an ambitious one but may give the company the foothold in North America that they need.
Investors should keep an eye out for the company as they push to become one of the biggest brands in electrical components. In additions, “ABB is suspending its $3 billion share buyback program as part of the deal, which will bolster its position as the second-biggest supplier of electrical components behind France’s Schneider Electric.” This is a great opportunity to get involved in what could be the money maker of the year.
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