ABB has announced it is to acquire GE Industrial Solutions, GE’s global electrification solutions business, in a deal valued at $2.6 billion.

In a statement ABB said the acquisition will strengthen its #2 global position in electrification and expand its access to the North American Market. As part of the transaction, ABB and GE have agreed to establish a long-term, strategic supply relationship for GE Industrial Solutions products and ABB products that GE sources today.

“Together with the GE Industrial Solutions team, we will execute our well-established plans in a disciplined way to bring this business as part of the global ABB family back to peer performance,” commented ABB CEO Ulrich Spiesshofer. “With this next step of active portfolio management, we continue to shift ABB’s center of gravity, in line with our Next Level strategy, by strengthening competitiveness, mainly in the North American market, and lowering risk with an early-cycle business.”

“This combination brings together two global businesses with a broad complement of electrical protec- tion and distribution assets,” added John Flannery, CEO of GE. “ABB values our people, domain expertise, and our ability to operate in the segments where we have depth and experience. GE will also benefit through an expanded strategic supply relationship with ABB as the two companies work together.”

GE Industrial Solutions will be integrated into ABB’s Electrification Products (EP) division. Included in the acquisition is a long-term right to use the GE brand. ABB will retain the GE Industrial Solutions management team and build upon its experienced sales force.

The transaction is expected to close in H1 2018, subject to customary regulatory clearances.