ABB announced the creation of a joint venture with Mitsubishi Electric’s carved-out low-voltage power distribution product business, forming a new company focused on low-voltage solutions for Asian markets. For a consideration of JPY 79 billion (~$495 million), ABB will acquire a controlling 51 percent stake in the newly carved out company as well as full ownership of the related sales operations outside of Japan of Mitsubishi Electric’s low-voltage power distribution products. The transaction, which provides an option for full ownership by ABB in the mid-term, is expected to close in the second half of 2027, subject to regulatory approvals and other customary closing conditions.
The new company brings together ABB’s technology and global sales network with Mitsubishi Electric’s established market presence. It will transform the limited presence of ABB’s Electrification business area in Japan into a leading position in one of the world’s largest electrification markets, while strengthening ABB’s ability to grow across Asia-Pacific.
Mitsubishi Electric’s power distribution business employs around 2,800 people, with dedicated manufacturing facilities in Fukuyama, Japan, and Hanoi, Vietnam. Its portfolio includes low-voltage circuit breakers, switches, motor starters, contactors and control devices, energy measurement and monitoring equipment, and uninterruptible power supply systems.
The joint venture advances ABB’s well-established local-for-local strategy, sourcing and producing close to customers in key markets. By combining ABB’s products and global sales network with Mitsubishi Electric’s customer relationships and local manufacturing footprint, the joint venture will create a broader offer for customers in Asia-Pacific, while giving ABB the opportunity to introduce proven technologies to Mitsubishi Electric’s customer base.
In FY2025 ending March 2026, Mitsubishi Electric’s Low-Voltage power distribution business achieved net sales of around JPY 102 billion (~$640 million) with a low double-digit EBITDA margin. The related sales operations outside of Japan represent approximately 15 percent of revenue. The transaction values the combined businesses at a total enterprise value (EV) of around $890 million and implies an EV/Sales multiple of around 1.4x and an EV/EBITDA multiple of around 11.1x based on FY2025.
ABB expects synergies to improve the joint venture’s earnings, reducing the implied EV/EBITDA multiple to the mid- to high- single-digit range. ABB expects the joint venture to be accretive to earnings per share after year one and to achieve an operational EBITA margin of at least 20 percent within five years, comparable with other ABB Electrification operations.
For more information, visit abb.com.
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