(Reuters) - General Electric Co GE.N has resumed negotiations to sell its industrial solutions business to Swiss engineering company ABB Ltd ABBN.S, after the U.S. industrial conglomerate moderated its price expectations, people familiar with the matter said.
The move underscores the determination of John Flannery, who took over from Jeffrey Immelt as GE’s chief executive on Aug. 1, to continue to divest non-core assets, as he carries out a review of the company’s portfolio.
GE is entertaining the possibility of selling its industrial solutions business for a little over $2 billion after initially hoping for more than $3 billion, four sources said this week. The talks with ABB had ended last month over price disagreements.
There is no certainty of a deal and another bidder could still emerge, the sources said. However, French electrical component and energy management group Schneider Electric SA SCHN.PA, which Reuters reported in April was vying for the GE unit, has since lost interest, the sources added.
The sources asked not to be identified because the negotiations are confidential. GE and ABB declined to comment, while Schneider Electric did not immediately respond to a request for comment.
GE’s industrial solutions business offers circuit breakers, relays, panel boards and other industrial electrical equipment for several markets, including the healthcare, mining, renewable energy, telecommunication, construction and data center sectors.
GE, which makes everything from power plants and jet engines to medical scanners and locomotives, has been reviewing its portfolio after divesting its finance, appliances and NBCUniversal units in recent years. Nelson Peltz’s activist hedge fund Trian Fund Management LP has also been pressuring GE to cut costs and focus on its core industrial businesses.
Earlier this year, GE agreed to sell its industrial water treatment business to French waste and water group Suez SA SEVI.PA and Caisse de dépôt et placement du Québec for 3.2 billion euros ($3.4 billion).
Last month, Schneider Electric said it would acquire automatic transfer switch maker Asco Power Technologies for $1.25 billion from Vertiv, the former network power business of Emerson Electric Co EMR.N that is now owned by private equity firm Platinum Equity LLC.
That deal eliminated Schneider Electric as a potential buyer for GE’s industrial solutions business, because such a deal would face significant antitrust hurdles, according to the sources.
ABB Chief Executive Ulrich Spiesshofer has been under pressure to tackle lower profitability at the Swiss engineering company, after higher raw material prices and overcapacity issues dented its latest quarterly earnings.
Reporting by Greg Roumeliotis and Alwyn Scott in New York; Editing by Lisa Shumaker