Column: Market review
Sic Transit Gloria Dux
In the third quarter of 1987 simultaneous announcements in Sweden and Switzerland made public the news that an agreement had been concluded which would see the merger of Asea AB and BBC Brown Boveri Ltd to form the new company ABB. Headquartered in Zurich, Switzerland each parent company held 50 percent of the new company and operations began on January 5, 1988. Over the next two years ABB acquired about 55 companies.
Some of the major events are as follows:
In 1990, ABB purchased Westinghouse’s metering and control business.
Also, in the early 1990s, ABB purchased Combustion Engineering (C-E), 1994 saw ABB emerge from a two year consolidation phase to begin new volume and profit growth. The company concentrated on the fast-growing service markets in Western Europe and North America.
Through the mid 1990’s the demand in emerging markets for new infrastructure drove expansion through internal growth acquisitions and majority joint ventures. In Asia, ABB now had 30,000 employees and 100 plants, engineering, service and marketing centres. ABB also completed the merger at Board level in 1996 with the integration of its parent companies’ Boards into the ABB Group Board.
Continuing with its expansion plans, ABB purchased Elsag Bailey, a process automation group, in 1997 which included Bailey Controls, Hartmann & Braun, and Fischer & Porter. This was the largest acquisition to date in ABB’s history. ABB bought International Combustion Ltd from Rolls-Royce in 1997.
March 1999 saw a deal that created a world leader. ABB and French company Alstom merged their power generation businesses to form ABB Alstom Power making the most of the complementary qualities of both parent companies and organised with the new company alignment in mind.
ABB formally divested from a joint venture named ABB-Alstom Power in 2000, and sold its interest in conventional power generation systems to Alstom Power. ABB’s nuclear business was sold to BNFL and merged into Westinghouse Electric Company. ABB’s Building Systems business unit was sold off in 2004 to Capvis, a Swiss private equity company, as part of ABB’s strategy to focus on power and automation technologies. ABB’s building systems businesses in Australia and Hong Kong were sold off the year before.