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25 September 2017 By Liam Proud Follow @liamwardproud

The Swiss group is shelving a $3 bln buyback programme to acquire GE’s non-core industrial solutions unit. On the surface it’s a strange move for a company that’s faced calls to simplify and boost margins. But a low price and high synergies mean ABB investors might still prosper.

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Swiss engineering group ABB said on Sept. 25 it will buy General Electric’s Industrial Solutions business for $2.6 billion.

Products made by the GE unit include circuit breakers, switchgear and power supply equipment used for facilities including data centres.

The Zurich-based group expects annual cost synergies of around $200 million by the fifth year of the deal, which also grants ABB long-term rights to use the GE brand.

ABB will fund the deal with existing cash, and will put on hold a previously announced share buyback programme. The group led by Ulrich Spiesshofer in Oct. 2016 said it planned share buybacks of up to $3 billion from 2017 through to 2019.

ABB shares were up 0.5 percent to 24.06 Swiss francs by 0855 BST.

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