ABBSwiss-Swedish engineering giant, ABB has entered into a deal to buy solar inverter company, Power-One, for $1 billion dollars or $6.35 per share. The deal includes Power-One’s net cash of $266 million.

The acquisition will see ABB take up the position of the second largest supplier of solar inverters in the world. They will be a global leader in what they have explained as the ‘most attractive and intelligent part of the PV value chain.’ ABB Chief Executive Officer, Joe Hogan said there is some risk buying this business in such a “tumultuous market” however, they anticipate that they are buying into a market that will increase by 10% annually. “If you wait in this industry until it’s very clear what it’s going to look like, you are not going to be paying the multiples that we are "Power-one Chaning the Shape of Power" with a wavy red line through itpaying here today,” Mr Hogan said on a conference call. The increase is expected to be driven by rising electricity costs together with the falling cost of installing solar power. Already, the cost of electricity is reaching parity with solar power.

“Solar PV is becoming a major force reshaping the future energy mix because it is rapidly closing in on grid parity,” said Mr Hogan. “Power-One is a well-managed company and is highly regarded as a technology innovator focusing on the most attractive and intelligent solar PV product. The combination of Power-One and ABB is fully in line with our 2015 strategy and would create a global player with the scale to compete successfully and create value for customers, employees and shareholders.”

Power-One will be integrated into ABB’s Discrete Automation and Motion unit which produces robots, motors and drives. This means they will have access to ABBs substantial research and development, global services as well as sales capabilities. “The acquisition supports the implementation of the division’s strategy for renewable energy and the goal to build on our strength in power electronics,” said Ulrich Spiesshofer, head of ABB’s Discrete Automation and Motion division.

The boards of both ABB and Power-One have approved the deal; however it still needs the shareholders and regulators approval. The deal should be completed in second half of 2013.

ABB was founded in 1883 and is a leader in power and automation technologies that enable utility and industry customers to improve their performance while lowering environmental impact. They operate in around 100 countries and employ around 145,000 people in total. In 2012, ABB had revenues of $6.7 billion in the USA with 20 000 employees.

Power-One has 40 years experience in power supply with its headquarters in Camarillo, California. They employ around 3 300 people around the world, mainly in China, Italy, Slovakia and the United States.