Only months after ABB announced Hitachi would acquire a majority stake in its flagship power grids business for $11 billion, the company’s board of directors ousted CEO Ulrich Spiesshofer and officially launched a search for a new leader.
The Zurich-based technology giant said on April 17 that the board of directors and Spiesshofer “mutually agreed for him to step down from his role,” which he held since 2013. Board chairman Peter Voser will assume the CEO’s seat as the company searches for a new CEO.
The shakeup comes four months after ABB and Hitachi, a long-term partner, announced that the Japanese firm would acquire an 80.1% stake in the company’s lucrative Power Grids business. As ABB officials told POWER in March, the deal aims to further strengthen the power grids business that has been beset by disruptions as the global power sector transition unfolds.
The partnership, which builds on a 2014 deal to collaborate on the Japanese high-voltage direct current (HVDC) market, would provide customers with a “stronger, smarter, and greener grid,” as well as provide ABB with access to new and growing markets in Asia, officials said.
ABB, however, noted that its long-term strategy was to divest Power Grids and focus on emerging digital industries, including electrification, industrial automation, motion, robotics, and discrete automation. The move, part of an attempt to simplify the company’s sprawling business model and structure, was an “attractive step at the right time, with the right partner,” it said.
The transaction, which is subject to regulatory approvals, is expected to be completed by the first half of 2020. The joint venture will be headquartered in Switzerland, and ABB’s Power Grids management team would run it in the interim to ensure business continuity.
But as Bloomberg reported on April 17, Spiesshofer had “long resisted” the business separation advocated for by activist investor Cevian Capital, which owns a 5.3% stake in the company. On Tuesday, shareholder Artisan Partners reportedly pushed for “splitting out” its electrification business. Investor AB, ABB’s largest investor, which holds a 10.7% stake, supports the ABB strategy of focusing on digitalization, electrification, automation and robotics,” Nasdaq.com reported on Wednesday.
“After 14 years of ‘all in’ dedication and commitment to all our employees and customers, I hand over to Peter a trimmed ABB ship that is on a clear course and gaining speed,” Spiesshofer said Wednesday.
As an ABB spokesman told POWER on April 17, interim CEO Peter Voser will continue to stand behind the decision to sell Power Grids to Hitachi. “The process of carving out the business is on track. The transaction is expected to be completed in the first half of 2020,” he said.
—Sonal Patel is a POWER associate editor (@sonalcpatel, @POWERmagazine)
Updated (April 17): Adds ABB comments about transaction status.