The boards of the two companies agreed a deal in which ABB will buy Power-One for $6.35 a share, or around $1.03 billion in equity value, which includes Power-One's net cash of $266 million, the Zurich-based company said Monday.

"Solar photovoltaic is becoming a major force reshaping the future energy mix because it is rapidly closing in on grid parity," said ABB Chief Executive Joe Hogan.

Power-One makes solar inverters, ranging from residential to utility applications, has a broad global manufacturing footprint, and also has a power solutions portfolio that is adjacent to ABB's power conversion business, ABB said in a statement. The deal is expected to close in the second half of this year.

The California-based company employs almost 3,300 people, mainly in China, Italy, the U.S and Slovakia, and in 2012 generated $120 million in earnings before interest, taxes, depreciation and amortization on sales of approximately $1 billion.

"The combination of Power-One and ABB is fully in line with our 2015 strategy and will create a global player with the scale to compete successfully and create value for customers, employees and shareholders," Mr. Hogan said.

ABB shares closed at 19.93 Swiss francs on Friday, up 6.3% so far this year.