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Cevian surprised about ABB’s paper business

6/15/2016

 ABB’s Annual General Meeting was held on 21 April. However, few shareholders had had a full picture of the company and its business portfolio prior to the meeting, according to the Swedish magazine Dagens industry.

ABB runs its own paper mills, which Cevian Capital, ABB’s second biggest shareholder, was not aware of at the time it bought its 5.16 percent stake in the company.

Dagens industri identified the following paper mills owned by ABB – Figeholm in Sweden, Raman Boards in Mysore, India, and Pucaro in Roigheim, Germany – all which are included in the company’s Power Grids unit and therefore are not reported separately, so their sales and earnings are not public.

The mills supply paper used as insulation for transformers, both to the company and to competitors.

The plant in Piešany, Slovakia is not a paper mill, as reported by Dagens industri, but Pucaro’s insulation kit centre and is one among several kit centres owned by ABB. Since insulation and transformer businesses are closely related, ABB like many other leading transformer OEMs operates its owninsulation kit centres.

The question is raised how much of a complete picture of ABB's business had the shareholders really have on the eve of the 2016 Annual General Meetingheld in Zurich yesterday.