ABB AND ALSTOM FORM JOINT VENTURE AS ALSTOM SELLS HEAVY DUTY GAS TURBINES TO GE.

The Swiss-Swedish engineering group Asea Brown Boveri said that it and French industrial conglomerate Alstom will merge their power generation businesses into a 50/50 joint company to be called ABB Alstom Power. ABB said it would receive USD1.5 billion from Alstom to compensate for the difference in the size of the contributed businesses. The new company would have 1998 pro-forma revenues of about USD11 billion and employ some 54,000 people. Improvements in efficiency and productivity and economies of scale were expected to yield synergy effects of about USD450 million annually within three to four years. The joint venture company will also comprise all of ABB's power generation segment, excluding its nuclear activities - mainly fuel processing and service and its service and financing-based distributed power business. The new company would comprise all of Alstom's energy sector activities, including gas turbines, but excluding the General Electric-based heavy duty gas turbine business above 20 megawatts, which Alstom announced on March 23 that it...