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What Company Will ABB Buy Next?
I was reading news from Smart Trend (stock market tracking and advice website) and came across a short article on Highest Levels of Cash in Heavy Equipment Industry.
What was interesting for me was the fact that ABB (NYSE:ABB) has (even after their acquisitions lately) over $9 billion in cash. They tried to buy Chloride Group for $1.25 billion and got outbid by Emerson for $1.5 billion. ABB pulled out of that bidding war. Now the question is whether ABB will try to buy any other companies and which one(s).
Few weeks ago there was an interview on Reuters with ABB’s CFO, Michel Demaré, he admits that ABB is looking to buy new companies. Here is a quote from him:
“I would be not surprised if further takeovers in the size of 0.5 to 2 or 3 billion dollars were to follow,”
He also said that:
“Very big deals in turn need a lot of time, cost a lot of money and can not always be realised,” he said. “I am quite happy with our gradual approach taken so far.”
Which might mean ABB is not going after large companies (I won’t mention company names). In either case ABB seems to be at a strong position in the automation and heavy equipment industry.ABB
- has over $9 billion cash
- just got a $50 million order in Italy
- is on track to achieve cost cuts of $3 billion by the end of 2010 compared to 2008 levels
- seem to have leaders that are looking to considerably expand the company
ABB is to release their Q2 reports on July 31st. Look for it to be beat expectations. Do you have any thoughts on what company ABB might go after next?
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