STUTTGART/ZURICH: ABB and DaimlerChrysler today announced that DaimlerChrysler has agreed to acquire ABB's share of their 50-50 joint venture Adtranz, aiming to boost the global rail transportation leader by integrating it into the strategic portfolio of DaimlerChrysler.
Under the agreement, DaimlerChrysler will pay a cash compensation of US$ 472 million for ABB's 50-percent share in Adtranz.
In a comment, DaimlerChrysler Board Member Eckhard Cordes, the Supervisory Board Chairman of Adtranz, said: "This is a clear signal that we intend to move Adtranz forward forcefully. By integrating Adtranz fully into our strategic framework, we expect gains both for Adtranz and for DaimlerChrysler as a world leader in innovative high-quality automotive and transportation products and services. We are confident that the new management team around Rolf Eckrodt will seize this opportunity to get Adtranz back on track even faster."
"As joint owner, ABB aimed at finding the best solution for the company we helped found," said Göran Lindahl, President and CEO of ABB. "We share the view of DaimlerChrysler and Adtranz that employees, customers and investors are best served by making it part of a group with a clear focus on transportation products."
DaimlerChrysler and ABB said they had also decided that existing supply agreements will continue as before.
The acquisition is subject to the customary approvals.
Established in January 1996, Adtranz is the largest company in its industry worldwide, with marketing, development and production in 60 countries, plus branch offices in another 40 countries. For 1998, Adtranz expects to surpass the 1997 revenues figure of US$ 3.7 billion/ DM 6.4 billion, and has about 24,000 employees.
Adtranz's portfolio ranges from electric and diesel locomotives and high speed trains to intercity and regional trains, trams and underground trains, people movers, signal and traffic control systems, fixed installations, infrastructure, and servicing and maintenance.
DaimlerChrysler is one of the world's leading automotive, transportation and services companies. Its passenger car brands include Mercedes-Benz, Chrysler, Dodge, Plymouth, Jeep®, and smart. Commercial vehicles are produced under the Mercedes-Benz, Freightliner, Sterling, and Setra brands. The group also manufactures aircraft and equipment at DaimlerChrysler Aerospace (Dasa) and offers financial and other services through DaimlerChrysler Services (debis). With 430,000 employees, DaimlerChrysler achieved 1998 revenues of approximately US$ 148 billion.
The ABB Group serves customers worldwide in power generation, transmission, and distribution; automation; oil, gas, and petro-chemicals; industrial products and contracting, and in financial services. The ABB Group, which reported orders in 1997 of US$35 billion, employs about 214,000 people in more than 100 countries.
