In August 1987 the Swedish Asea and the Swiss BBC Brown Boveri announced that the two companies were to merge under the name Asea Brown Boveri -- ABB. Asea’s history, however, dates back to 1883. BBC Brown Boveri was founded in 1891.
Asea – Allmänna Svenska Elektriska Aktiebolaget
Elektriska Aktiebolaget i Stockholm was founded in January 1883. The company was to manufacture electric lighting equipment and dynamos, based on the designs of the young engineer Jonas Wenström. The founder of the company was Ludwig Fredholm, a Stockholm entrepreneur.
In 1890 the company merged with Wenströms & Granströms Elektriska Kraftbolag, whose business was originally to build electrical power plants for industry and transportation. This company had been established in 1889. One of its founders was in fact Göran Wenström, brother of Jonas. The new company was named Allmänna Svenska Elektriska Aktiebolaget (the abbreviation Asea was to be used later on). The company headquarters were located in Västerås.
In 1889 Jonas Wenström started to develop his three-phase system, which comprised the whole chain generator, transformer and motor. In 1893 Asea built Sweden’s first three-phase power transmission (with a power of 300 h.p. as expressed in the unit used at that time) over a longer distance (15 km), between Hellsjön and Grängesberg. Asea contributed to the electrification of industry, homes and the railway network in Sweden. Subsidiaries were set up in such countries as the UK, Spain, Denmark and Finland.
The main line between Stockholm and Gothenburg with locomotives and converter stations from Asea was opened for traffic in 1926, and the world’s then largest naturally cooled transformer (45 MVA, 136 kV) was supplied in 1932. In the same year Asea acquired AB Svenska Fläktfabriken.
During the 1940s and 1950s Asea continued to expand with the power industry, the mining and steel industries, and transportation companies, both state-owned and private, being important customers.
In 1952 the world’s first 400 kV AC transmission between Harsprånget in northern Sweden and Hallsberg in the south entered into service. As the first company in the world Asea with the help of high-pressure technology successfully produced man-made diamonds in 1953.
The world’s first commercial HVDC transmission between the island of Gotland and the Swedish mainland was commissioned in 1954. A large number of foreign subsidiaries were established during the 1960s, and HVDC technology was introduced in the United States. In 1965 Asea Atom received the order for Sweden’s first commercial nuclear power plant, based on light water technology, Oskarshamn 1. Orders for similar nuclear power plants were also received from Finland during the 1970s. Asea supplied nine of the 12 Swedish nuclear reactors. The first industrial robot was introduced in the market in 1974.
During the 1980s Asea ranked among the world’s ten largest electrical engineering groups. The Nordic region and Europe accounted for two-thirds of the company’s turnover. The company focused strongly on electronics and robotics. Asea was the world leader in the HVDC field. Through Fläkt the company was also a leader in the environmental field.
In 1986, the year before the merger with BBC Brown Boveri was initiated, Asea employed 71,000 people and reported revenues of US$ 6.8 billion and income after financial items of US$ 370 million. Exports represented 70 per cent of the sales.
BBC Brown Boveri Ltd
BBC Brown Boveri Ltd was founded in 1891 by Charles Brown and Walter Boveri. Construction of BBC’s first plant, a generator factory, started in the same year in Oerlikon, Switzerland, where ABB’s headquarters are located today.
At the beginning of this century BBC played a decisive role in the electrification of Europe’s railway network, which started when BBC at its own risk electrified a 20-km line on behalf of the Swiss Federal Railways. The new company early on started to develop steam turbines. Just before World War 1 BBC supplied the world’s largest steam turbine (40,000 h.p.). Steam turbines became BBC’s largest and most important product. Due to the small size of the domestic market BBC soon set up subsidiaries all over the world, but with the main operations staying in Switzerland and Germany.
In 1986 BBC Brown Boveri reported revenues of SEK 58 billion and income after financial items of SEK 900 million. The Group employed 97,000 people, with 18,000 in Switzerland and 35,000 in Germany.
Asea + BBC = ABB
On 10 August, 1987 Asea and BBC Brown Boveri announced that the two companies were to merge and form at the year-end a company to be named ABB Asea Brown Boveri Ltd. The new company, with headquarters in Zurich, Switzerland, was to be owned on a 50/50 basis by Asea and BBC Brown Boveri. The new group, which started operations on 5 January, 1988, had revenues of US$ 17 billion and employed 160,000 people around the world.
Asea’s President Percy Barnevik was appointed President and Chief Executive Officer and BBC’s President Thomas Gasser Deputy Chief Executive Officer. Asea’s Curt Nicolin and BBC’s Fritz Leutwiler became Co-Chairmen. Bert-Olof Svanholm was named President of the Swedish ABB.
Just after the announcement of the merger, Asea acquired a majority stake in the Norwegian telecom and industrial group Elektrisk Bureau A/S.