ABB ABB Ltd

By Brian Blackstone and Nathan Allen 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (April 18, 2019).

ZURICH -- ABB Ltd. has abruptly parted ways with its chief executive, just months after the European engineering giant unveiled a major new strategy.

The Swiss company said Wednesday that Chief Executive Ulrich Spiesshofer would leave with immediate effect after five years in the top job. Under his leadership, ABB focused more on robotics and digital technology. Meanwhile, its share price struggled.

In December, ABB unveiled a strategy encompassing four areas: electrification, automation, robotics and motion. It also announced the sale of its power-grid unit to Japan's Hitachi Ltd. in a deal that valued the business at $11 billion.

While Mr. Spiesshofer had some success in pruning the group's portfolio including the power-grid deal, he was pressed by some shareholders -- notably Swedish activist Cevian Capital and U.S.-based Artisan Partners -- to deliver a more radical restructuring. Those big investors had called for a spinoff of the power-grid unit years earlier -- a move Mr. Spiesshofer resisted at the time.

His efforts also failed to energize the company's share price, which changed little during his tenure while engineering peers Siemens AG and Schneider Electric SE registered double-digit gains. ABB shares rose 5.4% to 21.20 Swiss francs ($20.98) on Wednesday.

Mr. Spiesshofer, 55 years old, said he was handing over a "trimmed ABB ship that is on a clear course and gaining speed."

ABB Chairman Peter Voser, a former CEO of Royal Dutch Shell PLC, will replace Mr. Spiesshofer on an interim basis until a permanent appointment is made.

Mr. Voser said the decision to part ways with Mr. Spiesshofer was mutual and that it followed deliberations over who should guide the company through its next phase. He added that ABB wouldn't change its strategy.

Cevian, which has a 5.3% stake in ABB, said it supported the company's strategic direction and had full confidence in Mr. Voser. Cevian co-founder Lars Förberg has been a member of the ABB board since 2017.

ABB also released its first-quarter earnings ahead of schedule to pre-empt any speculation that Mr. Spiesshofer's departure stemmed from a weak performance in the period.

Net profit for the quarter fell 6% to $535 million but beat consensus forecasts of $431.5 million. Orders rose 3% on a comparable basis to $7.61 billion, while revenue climbed 6% to $6.85 billion.

Write to Brian Blackstone at brian.blackstone@wsj.com

(END) Dow Jones Newswires

April 18, 2019 02:47 ET (06:47 GMT)

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