ABB buys GE industrial solutions business in $2.6bn deal

ABB has agreed to buy the industrial solutions business of General Electric in a deal valued at $2.6 billion. It will strengthen the Swiss company's business in the United States, its largest market.

The transaction is expected to generate cost savings of about $200 million annually, the company said in a statement on Monday. GE started a bidding process for industrial solutions in December.

Chief executive Ulrich Spiesshofer is trying to rekindle growth after wrapping up a four-year restructuring plan during which it regrouped operations and resisted pressure from activist Cevian Capital. The deal comes months after it bought an Austrian industrial software company for about $2 billion to plug a gap in its automation business.

Integrating the GE unit will lead to cumulative one-time costs of $400 million over five years, the company said.

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For GE, the transaction marks the first major portfolio change under chief executive John Flannery. Industrial solutions, one of GE's smaller divisions, has about 13,000 employees.