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(Corrects stock increase in final paragraph.)

Sept. 12 (Bloomberg) -- ABB Ltd. Chief Executive Officer Ulrich Spiesshofer plans to make “medium-sized” acquisitions of as much as $4 billion after reorganizing the company and advancing a share buyback plan announced earlier this week.

The Swiss maker of power transformers is streamlining operations and seeking to boost sales with a greater share of service and software revenues after Spiesshofer completed a review of business lines at the company.

“We will continue doing acquisitions,” he said in an interview at Bloomberg’s headquarters in New York. “We need to get the organizational change done and we need to see through the next stage of integration. As soon as we are at the stage that it makes sense, we are open to consider other things.”

During the reorganization, Spiesshofer said he will focus on organic growth while the company digests recent acquisitions. ABB spent $11 billion on U.S. companies in the last four years, including the takeovers of Baldor Electric, to add electric motors, and Thomas & Betts for low-voltage gear. ABB’s most recent larger deal, Power One for $1 billion, gave ABB inverters that allow solar power to be fed into grids.

ABB earnings have been dragged down this year by the power systems unit, which is grappling with delays to complex renewable energy projects. Spiesshofer has pledged to return the division, which manages large projects such as linking offshore wind farms to the grid, to profitability and hired consultants AlixPartners Ltd. to help with the turnaround. The CEO said he expects the reorganization of the unit to be mostly completed by the end of this year.

Big Issues

“Toward the first half of next year, we should be in a mode where we have a company that the big issues are sorted out, the organization is implemented,” Spiesshofer said today.

After that, Spiesshofer said he would “look at medium- sized” acquisitions in the range of $2 billion to $4 billion.

ABB’s new strategy aims to boost like-for-like sales by 4 percent to 7 percent a year. That’s down from the previous CEO’s goals set three years ago for annual growth of as much as 10 percent, reflecting a slowdown in the world economy.

The Zurich-based company also announced this week an unexpected $4 billion share buyback after the stock underperformed rivals including Siemens AG over the past year.

ABB shares rose 0.2 percent today in Zurich. Since Spiesshofer took over last year, ABB shares have risen about 0.5 percent. Siemens, which announced a 4 billion-euro ($5.2 billion) share buyback in November, gained 11 percent in the same period.

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To contact the reporters on this story: Richard Clough in New York at rclough9@bloomberg.net; Patrick Winters in Zurich at pwinters3@bloomberg.net To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net Molly Schuetz, John Lear

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