ABB forming Industrial IT software joint venture with U.S. partner.

Business & High Tech Editors

ZURICH, Switzerland--(BUSINESS WIRE)--Oct. 5, 2000

Global technology group ABB said today it has agreed to form a joint venture with U.S. software developer SKYVA International, a leading supplier of enabling software for collaborative commerce. ABB will pay US$ 130 million for a 53-percent stake in the venture, and will transfer software engineers into SKYVA as part of the transaction.

SKYVA International is a key developer of Java-based software for so-called collaborative commerce - where systems seamlessly link the business processes of suppliers, manufacturers and customers. Manufacturers can better balance the availability and flow of raw materials from their suppliers against finished products leaving the plant. Customers can connect the entire supply chain to see what products are available, at what price, and when they can be delivered. SKYVA software integrates all parts of the supply chain, including orders, transactions and delivery commitments.

"This business has excellent growth potential, and builds on our already existing technology platforms," said Goran Lindahl, ABB's President and CEO. "Faced with dynamic markets, growing global competition and the need for eBusiness solutions, our customers increasingly demand new ways to speed up, become more efficient, and move into the digital economy."

ABB said the partnership will spark growth in its Industrial IT business, offering tailored software solutions that link production and transactional processes for both manufacturing and service-sector customers. The software can naturally be applied to the automotive, chemical, mining and cement industries, to name a few. The systems are designed to complement offerings from major ERP (Enterprise Resource Planning) suppliers, allowing customers to maximize their installed ERP assets.

The joint venture will be headquartered in the United States and, pending customary approvals, begin operation immediately. It will employ well above 300 IT and eBusiness specialists in its first year of operation, and expects to take on an additional 200 software and business reengineering experts as the business grows.

ABB said it expects the joint venture to generate substantial new revenues from licensing this technology directly to customers and from delivering finished solutions through ABB's market channels. In addition, the joint venture will expand ABB's offering beyond the manufacturing sector and into service sectors, such as banking and insurance.

"We are very excited about combining our resources and expertise with ABB to deliver industry solutions that will build on the technical and strategic aspects of their businesses," said Hans-Werner Hector, board member of SKYVA International. "This alliance will add substantial resources and new revenue opportunities to our rapidly-growing business, while providing our customers with a complete solution from plant automation to the business systems."

The parties envision taking the company public in the next few years.

ABB Automation, one of ABB's six global business segments, is the world's largest automation company with 1999 revenues of more than US$ 8 billion. ABB Automation brings to the venture its expertise in real-time process automation across a wide range of industries.

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 160,000 people in more than 100 countries and had revenues of approximately US$ 25 billion in 1999. (END)