GENEVA, July 26 (Reuters) - Swiss engineering group ABB <ABBN.VX><ABB.ST> sees room for large acquisitions in the automation sector, its interim chief executive said in a newspaper interview on Saturday.
Michel Demare said the company had been wise to leave its $6 billion cash pile untouched in recent months, when stock prices slid and made previously highly-valued targets more affordable.
'Big acquisitions will be more related to automation than energy,' he told Switzerland's Le Temps, noting the company is already heavily engaged in the latter sector.
ABB, which sells equipment to utilities and to oil and gas companies, has been shielded from the worst of the global credit crisis because demand for power infrastructure has been very resilient in emerging markets like China and India, Demare said.
'In automation, the oil, gas, metals and minerals sectors are seeing very strong growth. ABB's good fortune is that we are much more oriented to those industries than to construction and consumption,' he said.
On Thursday, ABB posted a 34 percent rise in second-quarter net profit, to $975 million, and said it had $6 billion of net cash at the end of the second quarter.
Investors are keen to see how ABB's new chief executive Joseph Hogan, who struck up to 50 deals as head of GE <GE.N> Medical Systems and GE Healthcare, will spend that cash pile. Former ABB chief Fred Kindle, who had shied from takeovers, was pushed out in February.
Demare told journalists on a conference call last week that ABB has a number of small and medium-sized acquisitions in the pipeline and that larger transactions were also possible.
'Our strategy to put on hold those larger deals is paying off. Valuations are coming down and some of the larger transactions may become attractive from a shareholder value point of view as the prices have come down,' Demare said.
(Reporting by Laura MacInnis, editing by David Christian-Edwards) Keywords: ABB CEO/ tf.TFN-Europe_newsdesk@thomson.com ak COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
Michel Demare said the company had been wise to leave its $6 billion cash pile untouched in recent months, when stock prices slid and made previously highly-valued targets more affordable.
'Big acquisitions will be more related to automation than energy,' he told Switzerland's Le Temps, noting the company is already heavily engaged in the latter sector.
ABB, which sells equipment to utilities and to oil and gas companies, has been shielded from the worst of the global credit crisis because demand for power infrastructure has been very resilient in emerging markets like China and India, Demare said.
'In automation, the oil, gas, metals and minerals sectors are seeing very strong growth. ABB's good fortune is that we are much more oriented to those industries than to construction and consumption,' he said.
On Thursday, ABB posted a 34 percent rise in second-quarter net profit, to $975 million, and said it had $6 billion of net cash at the end of the second quarter.
Investors are keen to see how ABB's new chief executive Joseph Hogan, who struck up to 50 deals as head of GE <GE.N> Medical Systems and GE Healthcare, will spend that cash pile. Former ABB chief Fred Kindle, who had shied from takeovers, was pushed out in February.
Demare told journalists on a conference call last week that ABB has a number of small and medium-sized acquisitions in the pipeline and that larger transactions were also possible.
'Our strategy to put on hold those larger deals is paying off. Valuations are coming down and some of the larger transactions may become attractive from a shareholder value point of view as the prices have come down,' Demare said.
(Reporting by Laura MacInnis, editing by David Christian-Edwards) Keywords: ABB CEO/ tf.TFN-Europe_newsdesk@thomson.com ak COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.