ABB Creates New Single Share

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

Zurich, Switzerland, February 4 - The Boards of Directors of ABB Asea Brown Boveri Ltd of Switzerland, ABB AB of Sweden and ABB AG of Switzerland today announced they had unanimously approved a plan that would create a unified, single-class ABB share.

This will mark the final step in fully integrating ABB, the international engineering and technology group formed in 1988 by the merger of Asea of Sweden and Brown Boveri of Switzerland. The new single-class share will replace the current four classes of shares of ABB AB (formerly Asea) and ABB AG (formerly Brown Boveri), each with different voting rights and different nominal values. In the new company, each share will have the same nominal value and will carry one vote.
"The share capital simplification will enhance the liquidity of the ABB shares," said ABB President and CEO Göran Lindahl. "This will allow us to handle acquisitions and strategic alliances by using shares in addition to debt financing. A unified share simplifies the voting structure for shareholders, as well as corporate governance. Furthermore, it provides us with easier listing opportunities in Swedish kronor, Swiss francs, Pounds Sterling, the euro and U.S. dollars."
The single-class ABB shares will be offered in exchange for all existing shares in separate exchange offers for ABB AB and ABB AG shares. These share exchange offers are expected to commence shortly following the annual general meetings of ABB AG and ABB AB, scheduled to take place on March 18, 1999. Subject to certain exceptions imposed by local securities laws, shareholders will receive an information circular about the exchange offers before the annual meetings. Prospectuses will be made available during the second half of March. During the exchange offer period, closing approximately two months later, trading in currently issued ABB AB and ABB AG shares will remain open.
Formally, a new Swiss entity will be created to issue the unified single-class shares. The transaction, which is intended to be tax-neutral to shareholders, calls for ABB AG and ABB AB shareholders to receive 50 percent each of the share capital of the new entity, "New ABB", which in turn will hold 100 percent of the ABB Group. Further, ABB AB and ABB AG shareholders will be offered the single class shares on a level proportional to their current share in the capital of the existing parent companies. (Therefore, a shareholder with 2 percent of the capital in one of the parent companies will be offered 1 percent of the single-class share capital in ABB.)
In order to equalize the asset values in ABB AG and ABB AB, the ABB AG Board of Directors proposes that net excess cash in ABB AG in the amount of CHF 278 million be paid out as a special dividend to ABB AG shareholders, provided the exchange offers are accepted. This represents a dividend of CHF 30 gross per bearer share and CHF 6 gross per registered share.
The share exchange offers will be conditional upon at least 90 percent acceptance of ABB AG and ABB AB shares and votes, respectively. New ABB will reserve the right to complete the offers at a lower acceptance level. The exchange offers will contain certain other customary conditions.
The ABB Group will keep its current management structure and organization, and the Group headquarters will remain in Zurich, Switzerland. The Board of the new listed single parent company retains overall corporate responsibility for the ABB Group, as before. The following individuals are nominated for election to the Board of Directors:

Percy N. Barnevik, Sweden
Gerhard Cromme, Germany
Jürgen Dormann, Germany
Martin Ebner, Switzerland
Robert A. Jeker, Switzerland
Yotaro Kobayashi, Japan
Göran Lindahl, Sweden
Agostino Rocca, Argentina
Donald H. Rumsfeld, United States
Edwin Somm, Switzerland
Peter D. Sutherland, Ireland
Jacob Wallenberg, Sweden

The intention is to elect Mr. Percy N. Barnevik as Chairman and Mr. Robert A. Jeker as Vice Chairman.
ABB’s current dividend policy, calling for 30 percent to 50 percent of consolidated ABB Group net income to be distributed to shareholders, will also remain unchanged.
In connection with the transaction plan, a separate special dividend mechanism will be created to provide an opportunity for Swedish shareholders to receive their future dividends in Swedish kronor in a similar way as today. The proposed mechanism will be subject to receiving relevant tax rulings by authorities in Sweden and Switzerland, for which applications have been filed.
Other than the proposed dividend payments, the exchange offer will have a neutral impact on the Group’s and parent companies’ results.
Initial listing applications for the new single-class share are planned on the stock exchanges of Zurich, Stockholm and Frankfurt. The new shares are expected to be included in main indices in Switzerland, Sweden and for European stocks. The unified single share will provide investors with a simple way to invest in ABB which currently has a market capitalization of about US$ 20 billion.
Due to restrictions imposed by the U.S. securities laws, the exchange offers will not be extended to U.S. shareholders of ABB AG and ABB AB, including holders of the American Depositary Receipts issued by ABB AG and ABB AB, except as may, in certain limited cases, be done pursuant to an exemption from the registration requirements under the U.S. Securities Act of 1933. ABB AB’s American Depositary Receipts are expected to be delisted from the Nasdaq SmallCap Market in connection with the share capital simplification. ABB sees the share capital simplification as an important step in preparing for a full U.S. stock exchange listing, which remains a strategic goal for ABB.
ABB is being advised by Morgan Stanley Dean Witter. Credit Suisse First Boston and Enskilda Securities will act as advisors to ABB in respect of the exchange offers in ABB AG and ABB AB, respectively.

THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OF AMERICA, ITS TERRITORIES OR POSESSIONS. SECURITIES OF NEW ABB 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, 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 EXCHANGE OFFERS ARE ONLY BEING EXTENDED TO RESIDENTS OF COUNTRIES OUTSIDE OF THE UNITED STATES. SECURITIES OF "NEW ABB" 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, SOLD OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE LAWS.
(END)

    •   Cancel
      • Twitter
      • Facebook
      • LinkedIn
      • Weibo
      • Print
      • Email
    •   Cancel

    Contact us

    • Mr. John Fox
      Corporate Communications
      Tel: +41 1 317 7371
      Fax: +41 1 317 7958
    • Mr. Manfred Ebling
      Investor Relations
      Tel. +41 1 317 7313
      Fax +41 1 311 9817
    seitp222 c1256c290031524bc12567310025102e