Swiss technology company ABB has signed an agreement with the Italian inverter manufacturer FIMER to sell its solar inverter business. The deal is expected to help ABB to focus its business portfolio on other growth markets.

ABB Electrification business president Tarak Mehta said: “The divestment is in line with our strategy of ongoing systematic portfolio management to strengthen competitiveness, focus on the quality of revenue and higher growth segments.

“Solar is a well-established and key focus for FIMER and as such we believe them to be a very good owner for ABB’s solar inverter business.

“The combination of the portfolios under FIMER will support further sales growth. Through our intelligent low- and medium-voltage offering, ABB will continue to integrate solar power into a range of smart solutions including smart buildings, energy storage and electric vehicle charging.”

Currently, ABB’s solar inverter business employs nearly 800 in more than 30 countries. Its manufacturing and research and development facilities are located in Italy, India and Finland.

FIMER has agreed to honour all current warranties, while ABB will compensate the former for taking the business and its liabilities over.

Following the divestiture, ABB expects to assume an after-tax non-operational charge of nearly $430m in the second quarter of 2019. Around 75% of this charge will be represented by cash outflows that ABB will pay to FIMER from the deal closing date through 2025.

Additionally, ABB expects to incur nearly $40m of separation costs beginning in the second half of 2019.

FIMER CEO Filippo Carzaniga said: “We are glad to announce this further step in our development as FIMER’s focus on the solar business will be greatly enhanced by this integration.

“Our commitment to positively influencing the energy market will be realized through the development of new product platforms and innovative digital technologies.”

Completion of the deal is expected in the first quarter of 2020. This deal is subject to certain conditions, including completion of the carve-out and prior consultation with representative entities of employees.