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* Results of Power Grids strategic review due on Oct 4
* Activist investor Cevian has pushed for spin-off
* Role of Wallenberg investment vehicle seen as key
By John Revill
ZURICH, Sept 29 (Reuters) - ABB looks likely to tell investors next week that it wants to hang on to its Power Grids business, putting the Swiss engineering group at odds with some shareholders who want it to be spun off.
Activist shareholder Cevian Capital, ABB's second-largest shareholder, has lobbied to separate the business, saying ABB is now too complex and difficult to run.
But ABB appears to be leaning towards keeping the business because of the benefits it provides to the group as a whole.
"Cevian is pressing hard for the business to be separated and other investors are saying they appreciate companies with a focused portfolio," a source close to the matter said. "But some of the world's most successful companies are conglomerates.
"Power Grids doesn't have to be spun off."
On Oct. 4, ABB's board is due to reveal plans for the business, which makes components for offshore wind farms and electricity sub-stations and generated sales of $11.6 billion, in 2015.
Chief Executive Ulrich Spiesshofer is expected to highlight how ABB can improve Power Grids and exploit trends like renewable energy and the digitalisation of power technology.
Other topics may include tweaking the company's overall sales growth target and stepping up a $1 billion savings plan.
Spiesshofer's record points towards a revamping of the Power Grids business, ABB's least profitable. He turned around ABB's discrete automation and motion business before becoming CEO in 2013.
Cevian, which holds 6.2 percent in ABB, sees a break-up as a way to increase ABB's share price, which despite a recovery in 2016 has lagged rivals like General Electric, Siemens and Legrand over the past five years.
The stakes for Cevian are high. ABB is its largest investment at roughly 15 percent of its 13 billion euro ($14.6 billion) portfolio which also includes stakes in ThyssenKrupp and truckmaker Volvo AB
"Cevian is not in a hurry, they are not going to give up," said a person close to Cevian. "They will stay as long as the company is not performing to its full potential."
While other shareholders have backed Cevian's stance, , Investor AB, ABB's biggest shareholder, has said only that it supports the strategy review. Investor AB Chairman Jacob Wallenberg is also the vice chairman of ABB.
Some analysts have doubts about the value of a spin-off or sale, which would face obstacles such as gaining regulatory approval or attracting a high enough price.
"While a spin-off to shareholders of Grids is doable, we are not sure it would add much to the stock near term as the upside would have to be from earnings delivery long term and not the multiple," JP Morgan Cazenove said in a note.
Analysts see ABB's decision to sell the high-voltage cabling business of Power Grids as a sign that ABB wants to keep the rest of the business.
"As we have said all along, we will give an update on our strategic review at our Capital Markets Day on October 4," an ABB spokesman said.
$1 = 0.8921 euros Additional reporting by Anna Ringstrom in Stockholm. Editing by Jane Merriman