ABB in partnership to acquire polypropylene technology

Extends technology portfolio into fast-growing market

Zurich, Switzerland, August 25 – ABB, the global technology company, said today it has entered a majority joint venture to acquire a polypropylene technology that will extend its petrochemicals business into a new, high-growth market.

      The joint venture with Equistar Chemicals of the U.S. will purchase the Novolen polypropylene technology – including catalyst, process and product technologies – from Targor GmbH, a subsidiary of Germany’s BASF AG. It will also acquire the rights to market and license Targor’s metallocene polypropylene technology, used in the production of a new generation of high performance plastics. Targor will retain the right to use this technology for its own products.

      The joint venture, called Novolen Technology Holdings C.V., will be 80-percent owned by ABB and 20-percent owned by Equistar. Financial terms of the transaction were not disclosed. Pending customary approvals, the acquisition of the Targor intellectual properties – no physical assets are included – is expected to close in the third quarter of this year. In a separate transaction, Targor’s catalyst manufacturing facility in Spain will be purchased by U.S.-based Engelhard Corporation, who will also enter into an exclusive catalyst supply agreement with the joint venture.

      ABB said the joint venture takes its petrochemicals technology business into a new and fast-growing market. ABB, through its ABB Lummus Global unit, is already a world leader in the supply of ethylene and propylene technologies. Demand for polypropylene – a polymer used in a wide variety of consumer products – is growing significantly faster than the world’s industrial economies. Metallocene-related products are expected to command a growing share of the polypropylene market.

      “Our strategy is to expand our technology portfolio into high-growth areas that also build on ABB’s existing strengths,” said ABB President and CEO Göran Lindahl. “By bringing this key petrochemical technology into the company, this joint venture will give us top-line growth and good profitability. It’s part of our strategy to deliver technology solutions that make our customers more competitive.”

      ABB said it expects the joint venture to generate business in technology licensing, catalyst sales, and turnkey project development. Assessments of the total available market in these areas indicate a demand, aggregated over the next ten years, at more than US$ 15 billion. The joint venture announced today places ABB among the top three suppliers in this dynamic market, the company said.

      The ABB Group (www.abb.com) 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 160,000 people in more than 100 countries. (END)

      00_36_poly_e.doc


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    • John Fox
      Corporate Communications, Zurich
      Tel: +41 1 317 7371
      Fax: +41 1 317 7958
    • Maria Principe
      ABB Lummus Global
      Tel: +1 973 893 2953
      Fax: +1 973 893 2412
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