Paris/Zurich, March 31, 2000 - ABB and ALSTOM today announced that ALSTOM is acquiring ABB's share in their 50-50 joint company ABB ALSTOM POWER for a cash payment of Euro 1.25 billion.
Going forward, the power company will be integrated into ALSTOM's sector reporting structure. From the closing date, Claude Darmon, President and CEO of ABB ALSTOM POWER, will be re-confirmed in his position as head of ALSTOM Power and, in addition, is appointed Deputy CEO of ALSTOM.
"We are genuinely excited by this new milestone in the implementation of ALSTOM's strategy to concentrate our activities around the fields of energy and transport infrastructures. In our new configuration these activities will represent almost 80 percent of the Company's sales. The timing of this transaction could not be better: we stand today at the eve of a turnaround both in the context of renewed economic growth worldwide and also in terms of the power company's on-going initiatives to significantly improve operating performance. With this move, ALSTOM stands to benefit one hundred percent from the new growth prospects and the full synergy effects," commented Pierre Bilger, Chairman and CEO of ALSTOM.
Göran Lindahl, ABB President and CEO, said the transaction is in line with the global technology group's strategy to increase its reliance on IT-driven technology solutions, as well as on high-tech in general and on service. "Today we focus more on industrial IT, and on infusing IT solutions and service into our activities in Automation, Building Technologies, Oil, Gas and Petrochemicals, and Financial Services. But our IT-driven strategy also means that we create IT-based solutions for the dramatically changing needs in the markets of Power Transmission and Power Distribution."
"The proceeds from the divestment will be used to enhance ABB's position in B2B eCommerce, as well as for expansion in the business segments beyond Automation, for example in Power Distribution, Building Technologies and Financial Services," Lindahl added.
The transaction, which includes the resolution of all outstanding matters relating to the formation of the joint company a year ago, is subject to customary regulatory approvals.
The closing of ALSTOM's acquisition is expected within one month.
With 1999 pro-forma sales of Euro 9.8 billion, ABB ALSTOM POWER is a world leader in the supply of power generation services and equipment and employs over 50,000 people worldwide.
ALSTOM is the specialist in energy and transport infrastructures. Present in more than 60 countries, ALSTOM is organized in six sectors: Energy, Transmission & Distribution, Transport, Power Conversion, Marine and Contracting, all of these supported by the ALSTOM Network.
The ABB Group serves customers in power transmission and distribution; automation; oil, gas, and petrochemicals; building technologies; and in financial services. With novel IT applications, tailored software solutions, growing eBusiness and a fast expanding knowledge and service base, ABB is building links to the new economy. The ABB Group employs about 165,000 people in more than 100 countries.