ABB – ABB joint venture with Mitsubishi Electric to expand position in Asia-Pacific markets

EMR Analysis

More information on ABB: See full profile on EMR Executive Services

More information on Morten Wierod (Chief Executive Officer and Member of the Group Executive Committee, ABB): See full profile on EMR Executive Services 

More information on Christian Nilsson (Chief Financial Officer and Member of the Executive Committee, ABB): See full profile on EMR Executive Services

More information on the ABB Way: See full profile on EMR Executive Services

 

 

More information on Electrification Business Area by ABB: See the full profile on EMR Executive Services

More information on Giampiero Frisio (President, Electrification Business Area and Member of the Executive Committee, ABB): See full profile on EMR Executive Services

 

 

 

More information on Mitsubishi Electric: https://www.mitsubishielectric.com/en/index.html + Guided by its corporate philosophy, Mitsubishi Electric Corporation (TOKYO: 6503) places sustainability at the core of its operations and values stakeholder trust—encompassing society, customers, shareholders and employees. In pursuing profitability, capital efficiency and growth, Mitsubishi Electric works closely alongside customers to develop value-added solutions that address today’s complex challenges while enhancing the company’s sustainable corporate value.

Founded in 1921, Mitsubishi Electric has over a century of experience in delivering reliable, high-quality products and solutions. With over 200 group companies and approximately 150,000 employees worldwide, the company is a recognized global leader in manufacturing, marketing and selling electrical and electronic equipment and systems across a broad range of sectors, including public utility systems, energy systems, defense and space systems, factory automation systems, automotive equipment, building systems, air conditioning systems & home products, digital innovations, and semiconductor & devices.

Mitsubishi Electric recorded consolidated revenue of 5,894.7 billion yen (U.S.$ 36.8 billion*) in the fiscal year that ended on March 31, 2026. 

More information on Kei Uruma (President & Chief Executive Officer, Mitsubishi Electric): https://www.mitsubishielectric.com/en/about/management/profile/ + https://www.linkedin.com/in/kei-uruma-45ab879a/ 

More information on Mitsubishi Electric Factory Automation (FA) Division by Mitsubishi Electric: https://www.mitsubishielectric.com/fa/index.html + Automating the World. Mitsubishi Electric’s Factory Automation Systems business offers a wide array of automation and processing technologies—such as controllers, drives, industrial robots, and CNCs—designed to enhance factory productivity and quality, backed by a global service network.

Products from the Mitsubishi Electric Factory Automation (FA) Division  are the following:

• Industrial Computer
• Controllers
• Computerized Numerical Controllers(CNCs)
• FA Sensor
• Drive Products
• HMI
• Robots
• Low-voltage Power Distribution Products (Related to the carve-out and Joint Venture)
  • Low-voltage Circuit Breakers
  • Contactors and Motor Starters
  • Power Management Meters
• Medium-voltage Power Distribution Products
• Energy Saving Supporting Devices
• Laser Processing Machines
• Electrical Discharge Machines
• Electron Beam Machines

Mitsubishi Electric’s power distribution business employs around 2,800 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.

In FY2025 ending March 2026, Mitsubishi Electric’s Low-Voltage power distribution business achieved net sales of around JPY 102 billion (~$640 million) with a low double-digit EBITDA margin. The related sales operations outside of Japan represent approximately 15 percent of revenue. 

More information on Takayuki Tsuzuki (Senior Executive Officer, Group President, Factory Automation Systems, Mitsubishi Electric): https://www.mitsubishielectric.com/en/about/management/profile/ 

 

 

 

More information on the Joint Venture between ABB and the Mitsubishi Electric Low-Voltage Power Distribution Product Business: No website available yet. An official final commercial name for the joint venture company has not yet been publicly announced.

Per the terms of the transaction agreement:

• The Structure: Mitsubishi Electric will first establish a preparatory holding company to execute an absorption-type corporate split, transferring all low-voltage assets, employees, and the plants in Fukuyama and Hanoi into this new entity. 
• The Transfer: Once regulatory approvals are secured, ABB will officially purchase its controlling 51% stake in this new company, leaving Mitsubishi Electric with the remaining 49% stake.

The new entity is scheduled to be established on December 1, with the full business transfer and joint venture transaction slated to close on October 1, 2027. The commercial brand name under which the joint venture will market its low-voltage products across the Asia-Pacific region has not yet been unveiled.

For a consideration of JPY 79 billion (~$495 million), ABB will acquire a controlling 51 percent 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.

The new company brings together ABB’s technology and global sales network with Mitsubishi Electric’s established market presence. It will 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, while strengthening ABB’s ability to grow across Asia-Pacific.

The transaction values the combined businesses at a total enterprise value (EV) of around $890 million and implies an EV/Sales multiple of around 1.4x and an EV/EBITDA multiple of around 11.1x based on FY2025.

 

 

 

 

 

 

 

 

 

 

 

EMR Additional Notes:

• Extra Low-Voltage (ELV):
  • Extra-Low Voltage (ELV) is defined as a voltage of ≤ 50 V AC (RMS) or ≤ 120 V DC (ripple-free).
  • ELV systems are typically used where electrical safety is critical (e.g., building automation, control circuits, lighting, telecom).
• Low-Voltage (LV):
  • The International Electrotechnical Commission (IEC) defines Low Voltage (LV) for supply systems as voltage in the range > 50–1000 V AC or > 120–1500 V DC.
• Medium-Voltage (MV):
  • Medium Voltage (MV) is a voltage class that typically falls between low voltage and high voltage, with a common range being from > 1 kV up to ~30–36 kV (typical IEC practice).
  • Some regions (e.g., North America) extend MV up to ~69 kV, depending on utility definitions.
• High-Voltage (HV):
  • The International Electrotechnical Commission defines high voltage as above 1000 V AC and above 1500 V DC.
  • In practice, HV is often considered from ~36 kV up to ~230 kV in transmission systems.
• Super High-Voltage or Extra High-Voltage (EHV): 
  • Extra High-Voltage (EHV) is the voltage class used for long-distance bulk power transmission. The range for EHV systems is typically from ~220 kV to ~765–800 kV. “Super High Voltage” is not a standard IEC term.
• Ultra High-Voltage (UHV): 
  • Ultra High-Voltage (UHV) is the highest voltage class used in electrical transmission, defined as a voltage of ≥ 800 kV (AC) and ≥ 800–1000 kV (DC, depending on classification).

 

 

 

• Carve-out:
  • A carve-out is a corporate restructuring or transaction in which a company separates a business unit, subsidiary, product line or other part of its operations from the parent organization. The separated business may be established as a distinct legal entity, sold to an external buyer, or prepared for independent ownership or listing on a stock exchange.
  • Carve-outs are undertaken for various reasons, including strategic refocusing, raising capital, unlocking the value of a business unit, attracting specialized investment or facilitating a sale. Depending on the transaction structure, the parent company may retain partial ownership or provide transitional services, such as IT, finance or human resources, while the separated business establishes independent operations.
  • The term covers several possible structures. In an equity carve-out, a parent company sells a portion of the shares in a subsidiary, often through a public offering, while retaining a stake. In a spin-off, shares in a separated business are generally distributed to the parent company’s shareholders. In a business or asset sale, the relevant operations or assets are transferred to a buyer.

 

 

 

• Switchgear (Core Concept):
  • Broad term that describes a wide variety of switching devices that all fulfill a common need: controlling, protecting, and isolating electrical power systems.
    It also includes devices for protection, switching, isolation, and in some cases measurement (metering), although metering is typically handled by dedicated instruments.
  • Switchgear contains fuses, switches, and other conductive and protective components. However, circuit breakers are typically the primary and most critical component in modern switchgear.
  • It performs the function of controlling and protecting (not “metering” as a primary function) the flow of electrical power, as well as interrupting fault currents to prevent damage to equipment and ensure safety.
  • There are three types of switchgear, namely:
    • LV (Low Voltage)
    • MV (Medium Voltage)
    • HV (High Voltage)

 

• Fuses (Core Protection Devices):
  • A fuse is a single-use overcurrent protection device that interrupts a circuit by melting a calibrated conductor when excessive current flows.
  • Fuses are widely used from low voltage (LV) up to medium voltage (MV) and, more rarely, high voltage (HV) applications.
  • It is an electrical safety device whose essential component is a metal wire or strip that melts when too much current flows, thereby interrupting the current.
• Circuit Breakers (Core Protection Devices):
  • A circuit breaker is a mechanical electrical switch designed to protect an electrical circuit from damage caused by overcurrent, overload, or short circuit.
  • Its basic function is to interrupt current flow automatically upon fault detection (either via internal thermal/magnetic mechanisms in LV systems or external protection relays in MV/HV systems).
  • Unlike fuses, circuit breakers are resettable and reusable.
• Disconnectors (Core Protection Devices): 
  • A disconnector (also known as Isolator) is a mechanical switching device operated manually (or motorized) and only under no-load conditions to provide safe isolation.
  • They are used to isolate equipment for maintenance and ensure visible and verifiable separation from live circuits (critical for safety procedures).
• Contactors (Core Protection Devices): 
  • A contactor is a remotely operated electrical switch used for frequent switching of circuits, especially motors.
  • It is a special type of relay designed for higher current applications.
  • Contactors cannot interrupt fault currents and therefore must always be used in combination with protective devices such as fuses or circuit breakers.

 

• Fuse Switch-Disconnectors (Hybrid – Combined Devices):
  • A fuse switch-disconnector combines both protection and safe manual isolation in one device; it provides overcurrent protection like a fuse, and it also allows for manual disconnection of the circuit for isolation purposes.
• RCCB  – Residual Current Circuit Breakers (Hybrid – Combined Devices): 
  • Protects against earth leakage (residual current) and electric shock.
  • It does not protect against overload or short circuit and must therefore be used together with an MCB or fuse.
• RCD  – Residual Current Devices (Hybrid – Combined Devices): 
  • General term for devices that disconnect circuits upon detecting leakage current.
  • Trips typically within 10–50 ms, protecting against electrocution and fire.
• RCBO – Residual Current Breakers with Over-Current (Hybrid – Combined Devices): 
  • An RCBO protects against overcurrent + earth leakage in one device. It is a combination of:
    • MCB (overcurrent protection)
    • RCD (earth leakage protection)

 

• Circuit Breakers (By Application / Technology):
  • MCB (Miniature Circuit Breakers): 
    • Used in domestic and light commercial installations.
      • Rated current: typically up to 100–125 A
      • Protects against overload and short circuit
    • Widely replacing fuses in LV installations due to reset capability and ease of use
  • MCCB (Molded Case Circuit Breakers): 
    • Used in industrial and commercial systems.
      • Rated current: up to ~2500 A
      • Higher breaking capacity than MCB
    • Often includes adjustable trip settings for more precise protection
  • ACB (Air Circuit Breakers): 
    • Uses air as the arc insulating / quenching medium.
    • Used in low voltage but high current applications (e.g., main incomers in buildings)
  • VCB (Vacuum Circuit Breakers): 
    • Uses vacuum for arc quenching.
    • Common in medium voltage systems
  • OCB (Oil Circuit Breakers): 
    • Uses insulating oil for arc quenching.
    • Now largely obsolete / being phased out due to fire risk, maintenance complexity, and environmental concerns
  • Solid-State Circuit Breakers (also known as Semiconductor Circuit Breaker):
    • Electronic devices using semiconductors to interrupt current extremely fast (microseconds).
      • No moving parts
      • Used in DC systems, data centers, EVs
    • Key advantage: ultra-fast fault interruption compared to mechanical breakers
  • Hybrid Circuit Breakers:
    • Combine mechanical + solid-state switching for:
      • fast response
      • low losses
  • PTCB eFuse Circuit Breaker:
    • An Electronic eFuse Circuit Breaker (PTCB) is an electronic micro fuse for DIN rail protecting very low currents (typically below 1A in control and electronics circuits) to facilitate clear fault detection and precise fault localization.
    • Response times are shorter compared to conventional fuse protection and the exact current value can be adjusted at any time

 

• Specialized Fuses:
  • Reducer Fuses:
    • A reducer fuse is not a fuse itself, but rather an adapter that allows a physically smaller fuse to be installed into a larger fuse holder. A fuse reducer typically consists of a non-conductive, insulating body that encases the smaller fuse.
  • Electrified Vehicle (EV) Fuses:
    • EV fuses are specialized safety devices designed to protect the high-voltage DC systems in electric vehicles.
    • Specialized for:
      • High-voltage DC (500–1000V+)
      • High fault currents
      • Harsh environments (temperature, vibration)
    • Also designed to safely interrupt DC arcs, which are more difficult to extinguish than AC arcs

 

• Switchgear Technologies:
  • AIS (Air Insulated Switchgears):
    • Uses air as insulation.
    • Common in MV and HV outdoor substations due to simplicity and lower cost
    • AIS controls, protects and isolates electrical equipment in power transmission and distribution systems.
  • GIS (Gas Insulated Switchgears): 
    • Uses SF₆ gas (or alternatives) for insulation.
    • It is a compact metal encapsulated switchgear consisting of high-voltage components such as circuit-breakers and disconnectors, which can be safely operated in space-constrained environments (e.g., cities).
  • Pad-Mount Switchgears:
    • Outdoor, ground-mounted distribution switchgear used in utility and commercial networks
    • The pad-mount switchgear is made from the same modular switch and interrupter components as the vault switchgear. This means all components are sealed, submersible and protected, so you don’t have to worry about tracking, animal infestation, corrosion or the effects of condensation inside the enclosure.
  • Ring Main Unit (RMU):
    • A ring Main Unit (RMU) is a Medium-Voltage, gas-insulated, fully sealed cabinet used to measure, connect, and integrate transformer protection functions with a fixed type breaker. Ring Main Units are safe, reliable, low-maintenance, and easy to replace switchgear.
    • A Ring Main Unit (RMU) is a factory assembled, metal enclosed set of switchgear used at the load connection points of a ring-type distribution network.
  • Dead Tank Circuit Breaker (DTB):
    • A Dead Tank Circuit Breaker (DTB) is a high-voltage, air-insulated switchgear where the interrupter units are housed in a grounded, metallic tank filled with insulating gas (typically SF6 or eco-friendly alternatives). It provides superior safety, seismic resistance, and allows for direct integration of current transformers, making it ideal for substation applications up to 800 kV.

 

• Distribution Systems:
  • Load Center (Residential Distribution) – Panel Board (Commercial/industrial LV Distribution) – Switch Board (Large-scale industrial/commercial systems):
    • A Load Center is used in residential and light commercial applications to distribute electricity supplied by the utility company throughout the home or building to feed all the branch circuits. Each branch circuit is protected by the circuit breaker housed in the load center.
    • Panelboards are typically deeper and used in commercial/industrial LV systems, supporting more configurations.
      • Panelboards are only accessible from the front while  Switchboards allow rear access as well.
    • Switchboards are used in large commercial and industrial systems and can handle higher currents and more complex distribution architectures.
  • Distribution Box – Cabinets – Enclosures:
    • General term for protective housings for electrical distribution components.
    • Enclosures provide mechanical protection, electrical safety, and environmental isolation (dust, moisture, etc.)
    • It can refer to enclosures containing Panelboards, Switchboards, or other distribution equipment.
    • In terms of use, distribution boxes are generally used for households (smaller enclosures), and distribution cabinets are mostly used for centralized power supply. Distribution boxes and cabinets are complete sets of equipment. Distribution boxes are low-voltage complete sets of equipment. Cabinets have both high and low voltages.
    • An enclosure or distribution enclosure in a general term for any type of protective housing for electrical distribution components. It’s essentially a cabinet or box designed to safeguard components from environmental factors, prevent electrical shock, and potentially shield against electromagnetic interference.

 

• Distribution Hierachy:
  • Main Distribution Boards (MDB):
    • Primary distribution point receiving power from:
      • Utility
      • Transformer
      • Generator
    • An MDB is a panel or enclosure that houses the fuses, circuit breakers and ground leakage protection units where the electrical energy, which is used to distribute electrical power to numerous individual circuits or consumer points, is taken in from the transformer or an upstream panel.
  • Sub-Distribution Boards (SDB):
    • Subsidiary from Main Distribution Board that distribute electricity to specific areas/zones of a building.
    • A sub-distribution board or sub-board is usually a smaller breaker panel acting as a subsidiary to a larger Distribution Panel. This enables greater control and isolation of a subset of smaller circuits and breakers.
  •  Final Distribution Boards (FDB):
    • Distribution Boards that received from the Sub-Distribution Boards and supply to the final switches that connect electrical devices and appliances.

 

• Meter Cabinet (Meter Box): 
  • This is the entry point for utility power into a building. It houses the electricity meter that measures power consumption and the main fuses belonging to the utility company.
  • Typically sealed and controlled by the utility to prevent tampering with unmetered energy

 

 

 

• Motor Starter: 
  • A motor starter is an electrical device or assembly used to start and stop an electric motor and provide the control and protection functions required by the application. It connects the motor to its electrical supply through an appropriate switching device and may incorporate protection against sustained overloads, short circuits, phase loss and other abnormal operating conditions, depending on its design.
  • A conventional magnetic motor starter typically consists of two main components:
    • Contactor: An electrically controlled switching device that opens or closes the motor’s power circuit. When its coil is energized by a control signal, the contacts close to supply power to the motor; when the coil is de-energized, the contacts open and interrupt the supply. Contactors are designed for frequent switching of electrical loads within their specified ratings.
    • Overload relay: A protective device that monitors motor current and trips when an overload condition persists long enough to risk damaging the motor. It typically interrupts the contactor’s control circuit, causing the contactor to disconnect the motor from the supply. Depending on its design, an overload relay may also provide phase-loss or phase-imbalance protection. It does not generally replace dedicated short-circuit protection.
  • Depending on the application, a motor starter may also include a circuit breaker or fuses, control buttons, auxiliary contacts, monitoring functions or other protective devices. More advanced motor-control systems may incorporate soft starters or variable-frequency drives to control starting current, acceleration or motor speed.
  • Motor starters are widely used in industrial and commercial equipment, including pumps, fans, compressors, conveyors and other motor-driven machinery.

 

 

 

• UPS (Uninterruptible Power Supply):
  • An uninterruptible power supply (UPS) is an electrical device that provides temporary backup power and, depending on its design, power conditioning to connected equipment when the normal power supply fails or falls outside acceptable operating limits. A UPS typically includes an energy-storage system, usually a battery, together with power-conversion and control circuitry that maintains the supply to critical loads during an interruption or disturbance.
  • UPS systems are used to protect equipment such as servers, data-center infrastructure, telecommunications systems, industrial control equipment, medical devices and security systems against power interruptions and certain power-quality disturbances. Depending on the topology and capabilities of the unit, protection may include support during power outages, voltage sags and surges, undervoltage, overvoltage and some forms of electrical noise or frequency variation.
  • The available backup time depends on the stored energy, connected load, battery condition and system efficiency. Common UPS topologies include standby (offline), line-interactive and online double-conversion systems, which differ in how they condition the supply and respond to disturbances. A UPS generally provides short-term continuity, allowing equipment to continue operating temporarily or to shut down safely; longer backup periods may require additional batteries or a generator.

 

 

 

• EBIT:
  • Earnings Before Interest and Taxes (EBIT) is a measure of a company’s operating profitability before accounting for interest expenses and income taxes. It is also known as operating profit and shows how effectively a company’s core business is generating profit from its operations.
• EBITA:
  • Earnings before interest, taxes, and amortization (EBITA) is a measure of company profitability used by investors. It is helpful for comparing one company to another in the same line of business.
  • EBITA = Net income + Interest + Taxes + Amortization
• EBITDA: 
  • Earnings before interest, taxes, depreciation, and amortization (EBITDA) is an alternate measure of profitability to net income. By including depreciation and amortization as well as taxes and debt payment costs, EBITDA attempts to represent the cash profit generated by the company’s operations.
  • EBITDA and EBITA are both measures of profitability. The difference is that EBITDA also excludes depreciation.
  • EBITDA is the more commonly used measure because it adds depreciation—the accounting practice of recording the reduced value of a company’s tangible assets over time—to the list of factors.
• EV/EBITDA (Enterprise Multiple):
  • Enterprise multiple, also known as the EV-to-EBITDA multiple, is a ratio used to determine the value of a company.
  • It is computed by dividing enterprise value by EBITDA.
  • The enterprise multiple takes into account a company’s debt and cash levels in addition to its stock price and relates that value to the firm’s cash profitability.
  • Enterprise multiples can vary depending on the industry.
  • Higher enterprise multiples are expected in high-growth industries and lower multiples in industries with slow growth.

 

 

 

• Enterprise Value (EV) :
  • Enterprise value (EV) is a financial measure used to assess the value of a company’s operating business, taking into account both its equity value and its debt, while deducting available cash and cash equivalents. It is commonly calculated as market capitalization plus total debt, minus cash and cash equivalents. Depending on the valuation methodology, additional adjustments may be made for items such as preferred shares, non-controlling interests, leases or other financial claims.
  • Market capitalization represents the market value of a company’s outstanding equity, whereas enterprise value provides a broader measure that accounts for the company’s financing structure and cash holdings. EV is widely used in corporate valuation, mergers and acquisitions, and financial analysis, particularly when comparing companies with different levels of debt and cash.
  • Enterprise value is often compared with operating measures such as EBITDA or EBIT using multiples such as EV/EBITDA and EV/EBIT. These ratios help assess relative valuation, although meaningful comparisons require consistent accounting treatment and consideration of differences in growth, profitability, risk and business models.