Japanese multinational conglomerate Hitachi has completed the acquisition of 80.1% stake in Power Grids business of ABB for $6.85bn.

The acquisition deal was announced by Hitachi in December 2018.

The joint venture company formed by ABB and Hitachi, operated as Hitachi ABB Power Grids, was launched and commenced operations.

Headquartered in Switzerland, the joint venture is a major global player in power systems, with annualised revenues of approximately $10bn.

Employing roughly 36,000 people, Hitachi ABB Power Grids serves customers in over 90 countries.

Hitachi said that the combination of the power grid business with its advanced digital technologies that include Lumada, Hitachi and Hitachi ABB Power Grids will provide innovative energy solutions.

Hitachi will consider acquiring the remaining 19.9% stake of Hitachi ABB Power Grids

Hitachi ABB Power Grids CEO Claudio Facchin said: “Both Hitachi and ABB Power Grids have a rich legacy in technology and innovation that goes back over a century.

“Combining world-class power solutions with Hitachi’s leading open digital platforms presents us with new market opportunities and enables us to deliver greater customer value across the world.

“We remain committed to a sustainable future and will continue to facilitate secure, reliable and efficient electricity supply, as the partner of choice for a stronger, smarter and greener grid.”

Furthermore, the remaining 19.9% stake in Hitachi ABB Power Grids will be held by ABB, with a pre-defined option to sell the stake three years after closing of the transaction.

In line with its capital structure optimization programme, ABB plans to return to shareholders net cash proceeds of $7.6–7.8bn from the sale.

Hitachi said that will contemplate acquiring the remaining stake in the joint venture to make a wholly owned subsidiary after 2023.