ABB Ltd. decided to exit its solar inverter business to focus its business portfolio on other growth markets, and it reached an agreement to sell the unit to FIMER SpA.

"The divestment is in line with our strategy of ongoing systematic portfolio management to strengthen competitiveness, focus on quality of revenue and higher growth segments," Tarak Mehta, president of ABB's electrification business, said in a July 9 statement.

Zurich-headquartered ABB will compensate Italian company FIMER for taking over the business and its liabilities. As such, ABB expects to record an after-tax nonoperational charge of approximately $430 million in the second quarter.

About 75% of the charge is represented by cash outflows ABB will pay to FIMER from the deal closing date through 2025, according to a news release. ABB also expects up to $40 million of carve-out-related separation costs starting in the second half.

ABB's solar inverter unit is within its electrification business. It achieved revenues of about $290 million in 2018.

After deal closing, ABB expects operational EBITA margin for its electrification business to be impacted positively by more than 50 basis points.

Deal completion is expected in the first quarter of 2020.