Zurich, Switzerland – ABB, a power and automation technology group, has signed an agreement to divest its Thomas & Betts’ heating, ventilation and air conditioning (HVAC) business for US$260 million in an all-cash transaction to Nortek Inc., Providence, RI. The sale is expected to close in the second quarter of 2014, subject to regulatory clearance.
ABB is divesting this business because of limited synergies with ABB’s core portfolio. ABB will continue to supply its high-efficiency electrical motors and drives as well as its low-voltage products range to the HVAC industry.
The acquisition of Thomas & Betts in 2012 advanced ABB’s strategy of expanding the reach of its Low Voltage Products division into key geographies, sectors and products. By combining ABB’s low-voltage protection, control and measurement products with Thomas & Betts’ electrical components, ABB has created a broader low-voltage offering with significant market access.
“The divestment is in line with our strategy to continuously optimize our portfolio and to focus our efforts on driving profitable growth in our core automation and power businesses,” said ABB CEO, Ulrich Spiesshofer. “Overall, Thomas & Betts continues to provide great synergies with significant growth opportunities and our integration process is fully on track.”
“This sale allows us to focus on our electrical business and on the benefits from the synergies with ABB in North America and the rest of the world,” Thomas & Betts CEO Chuck Treadway added. “HVAC has delivered strong performance and its employees and customers will benefit from the focus and investment of Nortek, a specialist in this area. Acquiring this business will enable Nortek to extend its residential heating and cooling business into the adjacent segments of the commercial HVAC market.”
In North America, the acquisition of Thomas & Betts doubled ABB’s addressable market to approximately $24 billion, thanks to Thomas & Betts’ North American network of more than 6,000 distributor locations and wholesalers. In Europe and Asia, ABB’s well-established distribution capabilities and coverage provide much greater market access for Thomas & Betts’ product portfolio.