ABB single share plan reconfirmed after Swedish tax ruling

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO THE USA, CANADA, AUSTRALIA OR JAPAN

Zurich, Switzerland, May 25, 1999 – ABB today announced it will finalize its plan to pay future dividends to Swedish shareholders of the new single ABB share without creating additional taxes. The announcement follows a favorable Swedish court ruling on the tax implications of the plan. The acceptance periods for ABB AB and ABB AG shareholders to exchange their multi-class shares for the single-class ABB Ltd share are scheduled to end on June 15.

The dividend plan, known as the Dividend Access Facility (DAF), ensures that dividend tax levels for any Swedish shareholder of ABB Ltd – the new Swiss-based company created to issue the single-class share - remain as they were before the introduction of the single share. In particular, it allows shareholders with tax residence in Sweden - including trusts, pension funds and investment companies - to receive their dividends in Swedish kronor through the Swedish VPC system without paying Swiss withholding tax.

“The court’s decision is good for shareholders both in and out of Sweden because it simplifies the completion of the single share exchange offer, which supports the ongoing transformation of the ABB Group,” said ABB President and CEO, Göran Lindahl.

The issue in the May 21 ruling of the Swedish Supreme Administrative Court was whether the DAF would limit the possibility for shareholders in Sweden to apply for a tax deferral on the capital gain realized when they exchange their shares in ABB AB for the new ABB Ltd share. The court ruled that the DAF posed no obstacle to a tax-free exchange. As a result, Swedish shareholders can both benefit from the DAF and apply for the capital gains tax deferral.

The ruling also finally clears the proposed DAF from the perspective of Swiss tax authorities, who made their acceptance of the DAF (thus eliminating Swiss withholding tax for Swedish tax residents) conditional on the tax treatment in Sweden. The DAF will now be implemented for dividends paid out in the year 2000 and onwards.
ABB Asea Brown Boveri Ltd

Indicative Timetable

DateABB ABABB AG
June 15End of acceptance period End of additional acceptance period
June 17Last day of trading in Temporary Depositary Receipts
June 21Announcement of final result of the ABB AB exchange offerAnnouncement of final result of the ABB AG exchange offer
June 25Payment of special dividend to ABB AG shareholders (assuming completion of exchange offers). Last day of trading in ABB AG shares notified for exchange (second-line)
Assuming completion of the exchange offers:
ABB Ltd
June 221st day of trading in ABB Ltd shares on the Stockholm Stock Exchange. The trading from June 22, 1999 through and including June 24, 1999 will be on a “when issued” basis. The trading from June 22, 1999 through and including June 23, 1999 will be settled on June 29, 1999.
June 281st day of trading in ABB Ltd shares on stock exchanges in Zurich (Swiss Exchange SWX), the Frankfurt Stock Exchange and the London Stock Exchange. ABB Ltd shares available in former ABB AG shareholders’ custody accounts
June 29ABB Ltd shares available in former ABB AB shareholders’ accounts
ABB <http://www.abb.com> is a globalized technology and engineering company serving customers in power generation, transmission, and distribution; automation; oil, gas, and petrochemicals; industrial products and contracting; and financial services. ABB employs about 200,000 people in more than 100 countries.



THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OF AMERICA, ITS TERRITORIES OR POSESSIONS. THE SHARES OF ABB LTD HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE LAWS OF ANY STATE, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT), EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE LAWS.

The above information has been approved by Morgan Stanley & Co. Limited (which is regulated by the Securities and Futures Authority Limited), solely for the purposes of Section 57 of the Financial Services Act 1986. Morgan Stanley & Co. Limited is acting for ABB Asea Brown Boveri Ltd in connection with the exchange offers and no one else and will not be responsible to anyone other than ABB Asea Brown Boveri Ltd for providing advice in relation to the exchange offers.

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    Contact us

    • John Fox
      ABB Corporate Communications, Zurich
      Tel: +41 1 317 7371
      Fax: +41 1 317 7958
    • Manfred Ebling
      ABB Investor Relations, Zurich
      Tel: +41 1 317 7313
      Fax: +41 1 311 9817
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