ABB today agreed to sell its reinsurance business, Sirius to White Mountains, the Bermuda-based insurance holding company, for a cash price of $425 million.
‘The divestment is part of our strategy to focus on our core business of power and automation technologies, and to sell non-core assets when we can create maximum value for the company,’ said Peter Voser, ABB’s chief financial officer.
ABB said the divestment represents a complete exit from the reinsurance business. The transaction is expected to be completed in the second quarter of 2004, and is subject to customary regulatory approvals. ABB’s reinsurance business was part of ABB’s former Financial Services division, most of which has been divested over the past year.
The Sirius business employs around 200 people. At the end of September 2003, the business reported revenues of $572 million and earnings before interest and taxes (EBIT) of $99 million.
ABB will report a book loss on the sale of approximately $150 million. The loss comprises a discount on the net asset value of the business, goodwill write-offs, and transaction costs.