ABB branding.
(Bloomberg) — Swiss automation and electricity supplier ABB said the US Congress is reviewing its operations in China.
“ABB confirms receipt of the letter from the U.S. House of Representatives Committee on Homeland Security and the Select Committee on the Strategic Competition between the United States and the Chinese Communist Party,” the company said on Friday. “We take this matter seriously.”
ABB said it wants to provide an appropriate response. Shares of the Swiss company fell as much as 2.9% in early trading on Friday.
Some initial negative reaction in the shares is to be expected “given the history of large fines in the European industrials space from US investigations,” according to emailed comments from Redburn Atlantic analyst James Moore.
“If more details suggest that this isn’t a very specific issue to ABB, investors could then become concerned about other industrials with large China exposures,” added Moore.
Swedish broadcaster Sverige Radio initially reported the investigation, saying it was connected to potential espionage and other security threats concerning ABB’s business activities in China and the US. ABB was cooperating and had handed over a large amount of documents. China is the company’s second largest market.
–With assistance from Allegra Catelli and Rafaela Lindeberg.
(Adds share price, analyst reaction.)
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