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News > International
Alstom buys out ABB JV
March 31, 2000: 3:16 a.m. ET

French firm pays $1.2B for full control of power systems venture; shares surge
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LONDON (CNNfn) - French engineering firm Alstom said Friday it would buy Swiss partner ABB's 50 percent share in their power systems joint venture for 1.25 billion ($1.19 billion) in cash.
    Alstom and Swiss-Swedish ABB merged their power arms just a year ago to create the world's second-largest producer of power generating equipment after General Electric, with sales of 9.8 billion in 1999.
    graphicThe French company will assume full control of ABB Alstom Power by the end of April, with the company renamed as Alstom Power.
    The unit announced plans in February to shed 10,000 jobs over the next three years from a total workforce of 54,000, to try to  cut unit costs by 30 percent.
    Alstom had paid ABB 1.4 billion in March 1999 to compensate for the difference in the size of their respective power operations at the time of the merger.
    graphicFor ABB, the deal marks another step away from its roots as a heavy engineering company. ABB said it would use the proceeds to expand its business-to-business e-commerce products.
    Alstom (PALS) shares jumped 4 percent to 25.01 in Paris after the announcement, while ABB stock rose almost 1 percent in Zurich. Back to top

  RELATED STORIES

Alstom cutting 10,000 jobs - Feb. 28, 2000

ABB, Alstom tie power arms - Mar. 23, 1999
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