ABB is creating a joint venture with Mitsubishi Electric’s carved-out low-voltage power distribution product business. The goal is to form a new company focused on low-voltage solutions for Asian markets.
For a consideration of JPY 79 billion (~USD 495 million), ABB will acquire a controlling 51 per cent 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.
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Leading position in Japan
The new company brings together ABB’s technology and global sales network with Mitsubishi Electric’s established market presence. It is to 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. At the same time, the company targets growth across Asia-Pacific.
Giampiero Frisio, President of ABB’s Electrification Business Area: ‘Japan is one of the world’s most important electrification markets, where the people in Mitsubishi Electric’s low-voltage power distribution division have served customers and built deep expertise over many decades. This joint venture brings together that strong local foundation with ABB’s leading technologies and global reach, significantly strengthening our position in Japan and across Asia-Pacific.’
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Mitsubishi Electric portfolio
Mitsubishi Electric’s power distribution business employs around 2800 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 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.
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Synergies to support earnings
In FY2025 ending March 2026, Mitsubishi Electric’s Low-Voltage power distribution business achieved net sales of around JPY 102 billion (~USD 640 million) with a low double-digit EBITDA margin. The related sales operations outside of Japan represent approximately fifteen per cent of revenue.
ABB expects synergies to improve the joint venture’s earnings. The company expects the joint venture to be accretive to earnings per share after year one and to achieve an operational EBITDA margin of at least twenty per cent within five years, comparable with other ABB Electrification operations.
Picture ABB.
