Swiss technology group ABB has agreed to purchase GE’s global electrification solutions business GE Industrial Solutions for $2.6bn.

With the deal, ABB aims to realise around $200m of annual cost synergies after five years.

The deal is also expected to help ABB expand its presence in North America.

The transaction includes an agreement for the long-term use of GE’s brand and a strategic supply partnership for GE Industrial Solutions products, including ABB products that are currently sourced by GE.

Completion of the deal is subject to customary regulatory clearances.

"The transaction includes an agreement for the long-term use of GE’s brand."

ABB CEO Ulrich Spiesshofer said: “Together with the GE Industrial Solutions team, we will execute our well-established plans in a disciplined way to bring this business as part of the global ABB family back to peer performance.

“With this next step of active portfolio management, we continue to shift ABB’s centre of gravity in line with our Next Level strategy by strengthening competitiveness, mainly in the North American market, and lowering risk with an early-cycle business.”

Based in Atlanta, US, GE Industrial Solutions currently has a presence in more than 100 countries and employs around 13,500 people worldwide.

GE Industrial Solutions will be integrated into ABB’s electrification products (EP) division, which currently delivers 1.5 million low and medium-voltage products every day.