Equipment maker ABB has chosen to retain its division that sells to utilities, a major Raleigh employer, in defiance of pressure to separate itself from the business exerted by an activist shareholder.
The Swiss company announced Tuesday that, after it explored selling or spinning off its power grids division or folding it into a joint venture, it concluded that holding onto the unit was the best way to “unlock maximum shareholder value.”
ABB also said it was taking steps to drive the division’s growth and boost its profitability, including the formation of a pair of corporate partnerships focused on large electrical substations and offshore wind.
The power grids division’s U.S. headquarters is in Raleigh, where the unit employs 500 workers at N.C. State University’s Centennial Campus.
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The decision is good news for the region, said company spokeswoman Melissa London.
“We’re continuing to grow in North Carolina and in the area,” London said. “We’re continuing to hire.”
ABB employs about 2,000 workers across North Carolina, including 300 at its headquarters for the Americas region in Cary. The company, which employs 20,000 in the United States and 135,000 workers worldwide, makes equipment for utilities and heavy industry, including robots, instruments, motors and transmission components.
A Swedish activist shareholder, Cevian Capital, has been pressuring ABB to break off the power grids division. It contends ABB is too complex and difficult to manage.
“There’s a lively exchange going on,” said CEO Ulrich Spiesshoffer, according to Bloomberg News. “That does not mean we take the recommendation of every shareholder. That’s not how we run ABB.”
Last month ABB sold a high-voltage cable business within the power grids division, but that represented only about 5 percent of the unit’s revenue and didn’t appease Cevian.
(Bloomberg News contributed to this story.)