Buying ABB’s power-grid business and launching Hitachi Energy (2018)

The choice to fold up thermal power and buy the grid

The core of this acquisition lies not in responding to a financial crisis but in spending an enormous sum to buy a growth market by the hour. The decision to fold up the thermal power that ran back to the founding trade and the decision to go and take the transmission-and-distribution business that grows with decarbonization advanced as two sides of the same few years. In running the shrinkage of the general-electric maker and the expansion of large overseas acquisitions at the same time, one glimpses the Hitachi management that turned selection and concentration into normal operation.

That said, the weight of an investment of about $6.7B (¥720bn) is, just as it stands, the weight of recovering it. Whether the reading that transmission and distribution will grow with decarbonization proves right hangs on whether Hitachi Energy can pile up profit as a pillar of the energy business. Whether this choice — to fold up thermal power and buy the grid — was correct can be seen as a question that will keep being asked within the degree to which the medium-term management plan is achieved.