ABB's sale of share in ABB ALSTOM POWER concluded

Business Wire, May 11, 2000

Business Editors

ZURICH, Switzerland--(BUSINESS WIRE)--May 11, 2000

ABB said today it has concluded the sale of its 50-percent share in ABB ALSTOM POWER to ALSTOM, another milestone in the global technology company's transformation to a knowledge and service-based business.

"To be a leader by combining the classical economy with the new economy, we are increasing the share of our business in service, IT, eBusiness and other high-tech and knowledge-based activities," said ABB President and CEO Goran Lindahl. "We are growing in businesses and business combinations where we can be market leaders and gain significantly higher margins."

ABB and ALSTOM merged most of their respective power generation activities to create the joint 50-50 company in June 1999. After obtaining regulatory approvals for the divestment of its 50 percent to ALSTOM, ABB today received a cash payment reflecting the valuation of its share as well as outstanding issues between ABB and ALSTOM.

ABB keeps full ownership of the so-called Powerformer technology which is now being applied in several ABB products and systems. ALSTOM retains a license to use this technology in electricity generation as applied in the power generation area.

Earlier this month, ABB finalized the sale of its nuclear activities to BNFL of the U.K.

ABB will in the future be present in distributed power, with technologies like microturbines, and all renewables, such as fuel cells and wind power (but not including hydro power). Small-scale applications of combined heat and power are a particular focus of ABB. The company will present its strategy for these alternative energy technologies, including novel wind farm solutions, in London on June 8 (www.abb.com/newenergy).

In addition, ABB reiterates its forecast for 2000 of increased orders and revenues as well as operating earnings compared to 1999, excluding the extraordinary gain of US$262 million. The longer-term target of 12 percent result margin for the ABB Group by 2003 is not negatively affected by the divestments to ALSTOM and BNFL.

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 165,000 people in more than 100 countries.