ABB-Alstom Power begins operating as a joint venture
ABB Alstom Power began operating in June following the formal signing of the final agreements between ABB and Alstom, the co-owners of the 50-50 joint venture company. All regulatory approvals were received within three months of the merger announcement.
The deal was formally closed in Amsterdam on 30 June 1999, with ABB receiving a cash payment from Alstom of $1.5bn as compensation for the difference in size of the contributed businesses. Alstom completed the sale of its GE-licensed heavy duty gas turbine business to GE for $910m on 25 June.
The new company will employ around 58 000 people in more than 100 countries, and had proforma 1998 revenues of Euros9.9bn ($10.4bn). The company sees synergies resulting in savings of $500-600m after four years. The management will immediately begin integration and will initiate a detailed consolidation and restructuring plan.
ABB Alstom Power is a Dutch-incorporated company and will initially be headquartered in Brussels. In reporting its annual results, Alstom said that profitability would remain a key focus for the company, with the creation of ABB Alstom Power a key element of this strategy.