Rotork’s shares soar in London following Abb’s $5.5 billion bid
This is the largest acquisition ever made by the Swiss company
(Il Sole 24 Ore Radiocor) - The billion-pound bid launched by ABB is giving Rotork a boost on the London Stock Exchange. Shares in the British automation firm rose by over 66 per cent, outperforming the Stoxx Europe 800 index by a wide margin. In Zurich, however, ABB shares are down.
The Swiss giant has announced a $5.5 billion deal (€4.8 billion) to acquire Rotork. This is the largest acquisition ever made by ABB. The offer, which has been endorsed by the British board, is entirely in cash and offers 503 pence per Rotork share, representing a premium of ‘around 60 per cent’ over the average price of Rotork shares over the last three months. The transaction implies an enterprise value of approximately $5.5 billion, reflecting an EV/revenue multiple (based on actual 2025 figures) of approximately 5.3 and an EV/EBITDA (actual 2025 figures) of around 19.5x, “the latter set to fall to around 15x taking into account the expected synergies”, Abb states in a press release.
Rotork shareholders will also be entitled to receive an interim dividend for the period to 30 June 2026 of up to 3 pence per Rotork share, without any reduction in the value of the offer. It is a “strategic transaction in line with ABB’s mission focused on electrification and automation”. Rotork has a product portfolio that is “highly complementary” to ABB’s and “an excellent reputation amongst customers, capable of generating growth and attractive margins”. The British company manufactures automated equipment for the opening, closing and precision control of valves that regulate the flow of liquids and gases. The group, whose customers come from sectors such as oil and gas, water and wastewater treatment, power generation, chemicals, marine, mining and process industries, including data centres, has recorded an average annual organic revenue growth of 8 per cent from 2022 to 2025. With 2025 turnover of around $1 billion and an adjusted operating profit margin of 24.6 per cent, “Rotork is expected to contribute around 3 per cent to ABB’s turnover and have an immediate positive impact on the Swiss group’s operating EBITA margin”.
“ABB has been tracking Rotork for many years. We are convinced of the strategic importance of this transaction, which will expand our automation offering,” said Morten Wierod, CEO of ABB, as quoted in a press release. The Swiss group will finance the transaction using existing cash resources (approximately $5.8 billion in cash and marketable securities as at 30 June 2026) and existing secured bank credit facilities. Furthermore, the sale of ABB’s Robotics division to SoftBank, which has already been finalised, is expected to generate a net cash flow of approximately $4.8 billion upon completion, scheduled for the second half of 2026, “further strengthening ABB’s liquidity”. According to analysts at Vontobel, this acquisition is “expensive, but strategically sound”. The announcement of the deal came alongside the publication of the Swiss giant’s second-quarter results.
ABB reported a 20 per cent increase in EBITA to 1.93 billion dollars in the quarter ending 30 June, exceeding expectations, on revenue of $9.5 billion (+14% year-on-year and +12% on a comparable basis) and record orders of $12 billion (+30% and +28%). Net profit attributable to shareholders rose by 7% to 1.23 billion. In the third quarter, the group expects “low-to-mid double-digit comparable revenue growth, year-on-year”, and the operating EBITA margin is expected to show a sequential improvement compared with the second quarter. For the full year 2026, ABB forecasts ‘a positive order-to-sales ratio and low double-digit comparable revenue growth year-on-year’, which is therefore better than the previous target of around 5–10 per cent. Operating profitability is nevertheless expected to exceed last year’s figure of €6.31 billion, even excluding the proceeds from the sale of a property completed in the first quarter.
