Hitachi has signed a long-discussed plan to acquire ABB’s power grids business. Hitachi plans to initially acquire an 80.1% stake in the business and expects to close the acquisition in the first half of 2020, making Power Grids a consolidated subsidiary. The company also has an option to acquire the remaining 19.9% stake.

Hitachi said the acquisition would combine ABB’s grids offering including advanced digital grid solutions with Hitachi’s digital technology. It wants to build an energy platform that connects fields such as mobility, life and industry. It  will expand provision of the platform to ABB’s broad range of customers, and collaborate with them, “to promote more efficient use of electricity throughout society and empower and grow the social innovation business”.

The power grids market is rapidly expanding and is forecasted to reach more than $100 billion by 2020, at a steady annual growth rate of 4% or above for the period from 2017 to 2020, according to Hitachi figures.  

ABB’s power grids business operates four segments: “Grid Automation” provides protection control system and remote monitoring control systems to realize grid network stabilization, and management systems for supply and demand electricity market for trading electricity; “Grid Integration” includes digital substation, system integration and service solutions, High Voltage Direct Current (HVDC) systems, and power semiconductors; “High Voltage Products” includes gas insulated switchgear (GIS); and “Transformers” includes power, distribution and transaction transformers for railways.