ABB to sell its Thomas & Betts HVAC business

It was only in January 2012, that ABB acquired US-based Thomas & Betts, which supplies the construction, communications and power industries with cable connectors, wire and cable management systems, cable protection systems, power connection and control, as well as safety technology.

 

 Thomas & Betts also produces HVAC products under the Reznor, Gaz Industrie, and AmbiRad brands, and it is these that ABB reportedly wants to hive off. The HVAC products are focused on commercial and industrial markets and are designed to provide comfort and protection for factories, warehouses, greenhouses, garages and many other applications.

 

Several large industrial companies have been selling off assets recently to concentrate on their core strengths during an economic recovery that is tentative at best, and this move by ABB is part of a perhaps similar bid to sell other non-core businesses that could realise more than £0.6 billion.

 

Reuters says that the new ABB boss, Ulrich Spiesshofer, has been taking a close look at the group after his predecessor Joe Hogan spent more than £6 billion on acquisitions. It is believed that he is open to selling assets that do not fit well into ABB’s portfolio. And last October, ABB agreed to sell the assets of Baldor's generator-set business to Generac Holdings for an undisclosed price, only a month after Spiesshofer became CEO.

 

According to IHS (www.ihs.com), ABB has signed an agreement to divest the Thomas & Betts HVAC arm for £156 million in an all-cash transaction to Providence, Rhode Island-based Nortek, Inc., which claims to be a world leader in humidification products and systems. 

 

ABB’s core competencies are motors, drives, generators to the wind industry, and it is also the largest supplier of power grids worldwide, but its core businesses do not include HVAC systems. IHS believes that this lack of synergy is the main reason why ABB wants to sell. IHS has covered the divestiture trend in detail, and has recently started researching motor-driven systems in the HVAC industry.

 

For Nortek, the sale makes sense as Thomas & Betts’ HVAC business focuses on commercial comfort and protection, which is well-aligned with Nortek’s air-management and humidification systems, especially as Nortek owns the air handling unit (AHU) provider, CES Group. According to a recent study by IHS, the US market for AHUs has been estimated to be worth over £0.84 billion in 2013. 

 

With the acquisition of Thomas & Betts packaged HVAC business by Nortec, it is thought likely that Nortek will be able to optimise AHU production. 

 

Note that IHS has recently published a study on the world market for fans and blowers in HVAC and industrial applications.

 

It is also reported also that ABB plans to sell the US solar energy company Power-One that it bought for about £0.6 billion only last year.

 

 

ABB (www.abb.com) is a global leader in power and automation technologies. Based in Zurich, Switzerland, the company employs 150,000 people and operates in about 100 countries.  The firm’s shares are traded on the stock exchanges of Zurich, Stockholm and New York.

 

Today, ABB, which is a Voltimum Partner Company, stands as the largest supplier of industrial motors and drives, the largest provider of generators to the wind industry, and the largest supplier of power grids worldwide.