LONDON (Reuters) - ABB (ABBN.S) will not wait “multiple years” to return capital to investors and this could involve relaunching a share buyback that was put on hold after the Swiss group bought a unit from General Electric (GE.N), the CEO said on Wednesday.
The engineering firm and power grids maker suspended its $3 billion buyback on Monday as part of its decision to buy GE’s Industrial Solutions business for $2.6 billion.
Chief Executive Ulrich Spiesshofer, who has been reshaping ABB’s business through acquisitions and divestments, told Reuters he would hold off on more major deals to build up cash.
“As cash flow comes in and the balance sheet capacity goes up again, we will take the decision when and how to launch this (share buyback) program,” he said in an interview in London.
“ABB has a very strong cash generation capacity. This will not take multiple years until we can consider again that we deploy capital. Whether it’s in the form of the buyback or other forms will be decided at the time,” he said.
Operating in more than 100 countries, ABB employs about 136,000 people in sectors ranging from electrical products to robotics, power grids and industrial automation.
ABB said on Tuesday it had joined up with Northvolt to help build Europe’s largest lithium-ion battery factory in Sweden to cater for the expected rise in demand for electric cars and to reduce reliance on batteries from China and South Korea.
The deal covers a supply and technology partnership, and collaboration on research and product development. ABB Technology Ventures (ATV) said it would support the project’s initial phase with a 10 million euro ($11.8 million) investment.
Spiesshofer said ABB did not seek to own a battery manufacturer but was ready to establish partnerships with other companies as demand for electric cars picks up pace.
“My prediction is that between 2020 and 2025, there will be a massive, massive boost in this area (of electric vehicles), with the consumer driving the momentum,” he said.
Reporting by Kate Holton; Editing by Edmund Blair