ABB ALSTOM POWER joint company begins operations

Zurich, Switzerland, June 30, 1999 – ABB ALSTOM POWER, the leading global power generation group, today began operations following the formal signing of the final agreements between ABB and ALSTOM, the co-owners of the 50-50 joint venture.

ABB ALSTOM POWER received the relevant regulatory approvals earlier this month. The new group will employ some 58,000 people in more than 100 countries. About 37,000 employees are joining the global joint venture from ABB, which contributed most of its Power Generation segment to the new company.

With pro-forma revenues in 1998 of about US$ 11 billion, ABB ALSTOM POWER is the largest power generation group in the world. The group’s new management team will immediately begin integration and initiate a detailed consolidation and restructuring plan. ABB ALSTOM POWER will have provisions of US$ 723 million (Euro 700 million) for restructuring in its opening balance sheet. The synergies will result in savings of US$ 500-600 million in the fourth year.

ABB will account for its 50-percent share of the joint company using the equity consolidation method. Therefore, ABB’s earnings from the joint company will be reflected on one line of ABB’s income statement. As a result, ABB ALSTOM POWER’s orders, revenues, number of employees and balance sheet items will not be included in ABB’s financial statements.

ABB ALSTOM POWER will provide details on its financial statements for the first time at the end of 1999.

The President and Chief Executive Officer of the new group is Claude Darmon, formerly Deputy CEO of ALSTOM. The Management Board also includes Alexis Fries, previously head of ABB's Power Generation business and Nick Salmon, up till now head of ALSTOM's Energy Sector. The Chief Financial Officer (CFO) is Peer-Håkon Jensen, previously CFO of ABB in Norway. The Chairman of the Supervisory Board is Göran Lindahl, President and CEO of ABB. Mr. Lindahl is joined on the Supervisory Board by Pierre Bilger, Chairman and CEO of ALSTOM. Further members of the Supervisory Board are Jim Cronin and Francois Newey of ALSTOM, and Renato Fassbind and Armin Meyer of ABB.

ABB <http://www.abb.com> is a globalized technology and engineering company serving customers in power transmission and distribution; automation; oil, gas, and petrochemicals; industrial products and contracting; and in financial services. Power generation customers are served by the joint venture ABB ALSTOM POWER. The ABB Group employs about 160,000 people in more than 100 countries. (End)

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    Contact us

    • Hanning Kempe
      ABB Corporate Communications, Zurich
      Tel: +41 1 317 7822
      Fax: +41 1 317 7958
    • Manfred Ebling
      ABB Investor Relations, Zurich
      Tel. +41 1 317 7266
      Fax +41 1 311 9817
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