ABB Ltd. and Hitachi Ltd. have said they are in talks toward a deal on power grids, after the Swiss engineering giant was reported to be considering putting the division on the block earlier this year.

ABB is in discussions with Hitachi to expand and re-define an existing strategic power-grid partnership between the two companies that dates to 2014, it said in a statement Wednesday. Hitachi made a similar statement after trading hours in Tokyo. It's the first time either has commented on a potential transaction.

The Nikkei business daily reported Wednesday that the Japanese conglomerate is preparing to buy the business for as much as ¥800 billion ($7 billion). An agreement could be reached as early as this month after a final assessment, the newspaper said in a later update Thursday, after earlier saying it could be this week.