Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Highly experienced ex-Delta One trader with 17 years of experience trading arbitrage and related strategies across Asian markets.

Exempt Financial Adviser (EFA) under CrossASEAN Research Pte Ltd.

It is important to note that the information provided by Periscope Analytics is based on publicly available data and own knowledge, which has been gathered and synthesized from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions.

All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include, but are not limited to, company announcements, exchange filings, ETF and other passive investment vehicle holdings, and free float and volume data from third-party data providers. Periscope Analytics does not guarantee the accuracy and completeness of the forecasts, estimates and/or other information.

Pan-Asia Index Rebalances/ Events/ Delta One

Hitachi (6501 JP): A Bold but Risky Acquisition of ABB’s Power Grids

Event-Driven

In December 2018, <a href="https://www.smartkarma.com/entities/abb-ltd-265e66d1-1d85-42fd-817a-4fbcfbb74f2e" target="_blank" rel="noopener" data-smartkarma-citation="entities:27978:1">ABB Ltd (ABB SS)</a> agreed to sell its global power grids business to <a href="https://www.smartkarma.com/entities/hitachi-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:7797:1">Hitachi Ltd (6501 JP)</a> at an enterprise value of $11 billion as part of a plan to simplify its business structure and focus on digital industries. As a part of the global deal, <a href="https://www.smartkarma.com/entities/abb-india-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:8703:1">ABB India Ltd (ABB IN)</a> will demerge its power grid business into a separate entity, ABB Power Products and Systems India Limited (APPSIL).Shareholders of <a href="https://www.smartkarma.com/entities/abb-india-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:8703:1">ABB India Ltd (ABB IN)</a> on the record date of 23 December will receive 1 share of APPSIL for every 5 shares held in <a href="https://www.smartkarma.com/entities/abb-india-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:8703:1">ABB India Ltd (ABB IN)</a>. APPSIL is expected to list on the Indian stock exchanges in January 2020.<a href="https://www.smartkarma.com/entities/hitachi-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:7797:1">Hitachi Ltd (6501 JP)</a> will need to make an open offer for APPSIL once <a href="https://www.smartkarma.com/entities/abb-ltd-265e66d1-1d85-42fd-817a-4fbcfbb74f2e" target="_blank" rel="noopener" data-smartkarma-citation="entities:27978:1">ABB Ltd (ABB SS)</a> transfers 80.1% of their stake in APPSIL to them. With minorities holding 25% of APPSIL, this will result in 100% acceptance.<a href="https://www.smartkarma.com/entities/abb-india-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:8703:1">ABB India Ltd (ABB IN)</a> has underperformed <a href="https://www.smartkarma.com/entities/siemens-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:6440:1">Siemens Ltd (SIEM IN)</a> over the last year and there could be a trade here.

In December 2018, ABB Ltd (ABB SS) agreed to sell its global power grids business to Hitachi Ltd (6501 JP) at an enterprise value of $11 billion as part of a plan to simplify its business structure and focus on digital industries. As a part of the global deal, ABB India Ltd (ABB IN) will demerge its power grid business into a separate entity, ABB Power Products and Systems India Limited (APPSIL).Shareholders of ABB India Ltd (ABB IN) on the record date of 23 December will receive 1 share of APPSIL for every 5 shares held in ABB India Ltd (ABB IN). APPSIL is expected to list on the Indian stock exchanges in January 2020.Hitachi Ltd (6501 JP) will need to make an open offer for APPSIL once ABB Ltd (ABB SS) transfers 80.1% of their stake in APPSIL to them. With minorities holding 25% of APPSIL, this will result in 100% acceptance.ABB India Ltd (ABB IN) has underperformed Siemens Ltd (SIEM IN) over the last year and there could be a trade here.

ABB India - Demerger of the Power Grids Business, Open Offer and a Potential Trade