Monday, November 29, 1999

ABB aims to raise Indian unit stake to 75 pct

News posted by www.newsinfoline.com

ABB plans to raise its stake in its Indian subsidiary in a deal worth up to $965 million, a move that would strengthen its position in the fast-growing Indian market.The seller of power equipment to utilities and oil and gas companies said on Monday it intended to raise its stake to 75 percent from 52 percent and offered shareholders 900 rupees ($19.7) per share -- a premium of about 34 percent to Friday's closing price.The news lifted shares in ABB Limited India, which rose 22.5 percent, but shares in ABB slipped 1.6 percent at 0903 GMT, underperforming the STOXX 600 industrial goods and services index, and some analysts said the deal was rather pricey."ABB pays 3 times sales for the increase in its stake in India, which is not cheap but probably justified by its growth potential," Julius Baer said in a research note.The Swiss group tapped its war chest earlier this month to buy U.S. software company Ventyx for over $1 billion, its first billion-dollar deal in more than 10 years and the first major buy under Chief Executive Joe Hogan.Analysts have been watching the company closely over recent years to see how it will deploy its cash pile of more than $7 billion.Vontobel analyst Fabian Haecki said ABB had a realistic chance of getting the shares tendered given the 34 percent premium and said the deal made sense."We think that the Indian market is of great strategic importance for ABB given its superior secular growth potential," Haecki said in a note.ABB India had revenue of $1.4 billion and profit before tax of $117 million in 2009, ABB said.The open offer will be managed by HSBC Securities and Capital Markets (India) Private Limited. The offer is expected to begin on July 8 and end on July 27, while payment for the shares is expected to take place on Aug. 10, ABB said.(Editing by Hans Peters)(For more business news on Reuters Money visit http://www.reutersmoney.in)

News posted by www.newsinfoline.com

Click here to read more news from www.newsinfoline.com
Please follow our blogs

newsinfolinephotogallery
prabugallery
newsinfolinephotogallery1

photogallery1

No comments:

Post a Comment