By Pierre Bertrand

 

ABB Ltd shareholders approved Wednesday the spinoff of its turbocharging business unit into a separately listed company by way of a dividend in kind.

The Swiss technology company will distribute one share of Accelleron Industries Ltd. for every 20 shares of ABB held by shareholders. Accelleron manufactures turbochargers and large turbocharging components for engines which enhance propulsion and increase fuel efficiency while reducing emissions.

Accelleron's listing on the SIX Swiss index in Zurich is planned for Oct. 3, after shareholders representing 62% of the total share capital with a right to vote approved the measure with more than 99% of the vote.

The spinoff, set out in July, is part of ABB's effort to streamline business operations and focus on electrification and automation. The company said at the time the move would ensure the business unit's full value.

Last month, ABB said Accelleron expects to achieve an operational net income of about $150 million in 2022 and intends to pay its first dividend of around $75 million during the first half of next year. The turbocharging business is targeting a margin of operational earnings before interest, taxes and amortization of between 23% and 26% for the next four to five years.

In 2021 Accelleron booked revenue of $756 million with an operating margin of 25%.

 

Write to Pierre Bertrand at pierre.bertrand@wsj.com

 

(END) Dow Jones Newswires

September 07, 2022 07:45 ET (11:45 GMT)

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