ZURICH (Reuters) -ABB will spin off its turbocharging business to its shareholders, the Swiss engineering and technology company said on Wednesday, with the aim of listing it on the SIX Swiss Stock Exchange in October.
Shareholders will receive one share in the business, which ABB renamed Accelleron this year, for every 20 ABB shares they hold if the decision is approved at an extraordinary general meeting in September.
The proposed spin-off is part of ABB's strategy to simplify its portfolio and focus more on electrification and industrial automation.
ABB, which reports second-quarter earnings on Thursday, had been considering a sale or a spin-off of Accelleron, which generated sales of $756 million in 2021 and employs 2,300 people globally.
Accelleron's products are used in the marine, energy, rail and off-highway sectors, where they are used to increase engine output and raise efficiency while also reducing fuel consumption.
"After careful consideration involving a dual-track process, we have concluded that spinning off Accelleron is the best way forward – for Accelleron itself and for ABB’s shareholders," ABB Chief Executive Bjorn Rosengren said in a statement.
"This decision also forms a key part of ABB's active portfolio management while allowing our shareholders to actively participate in the future growth of this Swiss champion."
ABB said it has kept Credit Suisse (SIX:CSGN) and Goldman Sachs (NYSE:GS) International as exclusive financial advisers on the transaction. Credit Suisse will act as listing agent.