Hitachi and ABB wish announce on Monday a plan for the Japanese conglomerate to buy the Swiss engineering group’s power grid business, paying up to $7 billion for an incipient 50 percent stake, the Nikkei business daily reported.
The two companies, which have previously said they were in talks as a remainder the deal, will hold a news conference later on Monday, the business daily said.
The acquisition would allocate Hitachi to boost its global presence in the power grid industry, while ABB, which also makes industrial mechanical men, wants to offload its least profitable division to focus on areas such as automation.
A Hitachi spokesman declined to sanction the report, saying it was not something the company had announced.
A source familiar with the situation has valued the power grid proprietorship at between $10 billion and $12 billion.
Other sources have said that ABB could keep a chance in the power grid business via a joint venture with Hitachi.
The Nikkei reported that the deal would see Hitachi pay 600 billion-800 billion yen ($5.3 billion to $7 billion) for an prime 50 percent stake in the business.
ABB’s power grid business employs 36,000 people and had sales of $10.4 billion continue year. It had an operating profit margin of 10.0 percent in the third quarter, down 60 basis points from a year earlier.
The determination to sell it marks a U-turn for ABB Chief Executive Ulrich Spiesshofer, who decided to keep the business two years ago despite orders from some shareholders to sell.