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ABB GROUP FORMS JOINT VENTURE IN CZECH REPUBLIC

 ZURICH, Switzerland and STAMFORD, Conn., Jan. 7 /PRNewswire/ -- ABB Group and Prvni brnenska strojirna, Brno (PBS) have reached an agreement to form a joint venture that will take over PBS's core boiler, turbine and power plant businesses. The agreement was announced today in Brno by Ivan Kocarnik, Deputy Prime Minister and Minister of Finance in the Government of the Czech Republic. The Minister of Industry and Trade, Vladimir Dlouhy, has been closely involved and participated in cooperation with the Ministry of Privatization in the negotiations.
 The joint venture, ABB-Prvni brnenska strojirna BRNO (ABB-PBS) will be owned 67 percent by ABB and 33 percent by PBS Holding, which will control other PBS activities as well. The joint venture is expected to employ approximately 4,000 persons and will primarily offer its products and services to industrial customers as well as power utilities. In order to prepare the company to operate effectively in a market-oriented economy, ABB will provide management training in business administration, total quality management (TQM), and all other customer focus as well as technology-related fields.
 The selection of ABB and the negotiation of the definitive agreement were made with the support of the International Finance Corporation (IFC). IFC was retained by PBS as its advisor in February 1992.
 First Brno Engineering Plant has a long tradition, with a history dating back to 1814. In 1903 the company constructed its first steam turbine. In 1990 PBS was transformed into a joint stock holding company with the Czech National Property Fund, the State and private shareholders constituting the main ownership groups. The 1991 sales of the company were some 3.5 billion Czech Crowns. PBS enjoys a strong position in the Czech and Slovak markets for medium-sized industrial and utility power plants. The venture will enhance ABB's access to additional PBS markets.
 Richard Kuba, General Director of PBS, emphasized technology, market access, financial support and overall commitment as critical factors in PBS's choice of ABB as its partner. "Much of our current technology is equal to the best offered in the West, but in the long run, we need development, especially in areas such as brown coal, refuse incineration boiler technologies, small gas turbines and related mechanical drives. A strong affiliation will also expand our markets."
 "This new joint venture constitutes an important strategic alliance for ABB with an extremely competent partner," Goran Lundberg, executive vice president in charge of ABB's Power Plant Segment, said at a press briefing in Brno today.
 ABB, with more than $30 billion in revenues, is one of the world's leading power engineering firms. Formed in 1987 by the merger of ASEA of Sweden and Brown Boveri of Switzerland, it has since expanded rapidly. ABB has also grown in Eastern Europe and has acquired companies in Poland, Hungary, Romania, the former East Germany, and Croatia.
 In the United States, ABB Inc., headquartered in Stamford, provides products and services for the power, process, industrial automation, environmental control, mass transit and other markets. The U.S. company and its subsidiaries have sales of approximately $5.5 billion and some 29,000 employees.
 -0- 1/7/93
 /CONTACT: Karen Armour of ABB, 203-328-2217, or 203-655-9461 (residence)/


CO: ABB Inc. ST: Connecticut IN: SU: JVN

SH -- NY021 -- 2531 01/07/93 09:31 EST
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Publication:PR Newswire
Date:Jan 7, 1993
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