Train in Swiss Alps equipped with ABB technology.
(Kecko from Northeast corner of, Switzerland, CC BY 2.0 <https://creativecommons.org/licenses/by/2.0>, via Wikimedia Commons)
ABB LTD. (ASEA BROWN BOVERI)
ABB Ltd. is a Swedish-Swiss multinational corporation headquartered in Västerås, Sweden, and Zürich, Switzerland. It is traded on the SIX Swiss Exchange in Zürich, the Nasdaq Nordic exchange in Sweden and the OTC Markets Group's pink sheets in the United States. It was ranked 340th in the Fortune Global 500 list of 2020 and has been a global Fortune 500 company for 24 years.
ABB was formed in 1988 when Sweden's Allmänna Svenska Elektriska Aktiebolaget (Asea) and Switzerland's Brown, Boveri & Cie merged to create Asea Brown Boveri, later simplified to the initials ABB. Both companies were established in the late 1800s and grew into major electrical equipment manufacturers, a business in which ABB remains active. Its traditional core activities include power generation, transmission and distribution; industrial automation, and robotics. Between 1989 and 1999, the company was also active in the rolling stock manufacturing sector. Throughout the 1990s and 2000s, ABB acquired hundreds of other companies, often in central and eastern Europe, as well as in Asia and North America.
On occasion, the company's operations have encountered controversy. During 2001, an ABB entity pleaded guilty for bid rigging; the firm has also had three US Foreign Corrupt Practices Act bribing resolutions against it; in 2004, 2010, and 2022. In early 2002, ABB announced its first-ever annual loss, which was attributed to asbestos-related litigation. Within three years, the company had successfully restructured its operations. During the 2010s, ABB has largely focused its growth strategy on the robotics and industrial automation sectors. Prior to the sale of its Power Grids division to Hitachi in 2020, ABB was Switzerland's largest industrial employer.
Predecessor companies and formation
See also: ASEA and Brown, Boveri & Cie
Allmänna Svenska Elektriska Aktiebolaget (ASEA, English translation: General Swedish Electrical Limited Company) was founded in 1883 in Västerås, Sweden by Ludvig Fredholm as manufacturer of electrical light and generators.
Brown, Boveri & Cie (BBC) was formed in 1891 in Zurich, Switzerland by Charles Eugene Lancelot Brown and Walter Boveri as a Swiss group of electrical engineering companies producing AC and DC motors, generators, steam turbines and transformers.
Countries where ABB is present
On 10 August 1987, ASEA and BBC announced they would merge to form ASEA Brown Boveri (ABB). The new corporation would remain headquartered in both Zurich, Switzerland and Västerås, Sweden, with each parent company holding 50 percent. The merger created a global industrial group with revenue of approximately $15 billion and 160,000 employees.
When ABB began operations on 5 January 1988, its core operations included power generation, transmission and distribution; electric transportation; and industrial automation and robotics.
In its first year, ABB undertook some 15 acquisitions, including the environmental control group Fläkt AB of Sweden, the contracting group Sadelmi/Cogepi of Italy, and the railway manufacturer Scandia-Randers A/S of Denmark. During 1989, ABB purchased an additional 40 companies, including Westinghouse Electric's transmission and distribution assets, and announced an agreement to purchase the Stamford, Connecticut-based Combustion Engineering (C-E).
SEPTA ABB ALP44 No. 2308.
(Zb de 110, CC BY-SA 4.0 <https://creativecommons.org/licenses/by-sa/4.0>, via Wikimedia Commons)
Rolling stock manufacturing
ABB Group entered the heavy rail rolling stock manufacturing market in 1989 through a 40% shareholding in a consortium, headed with Trafalgar House and some former British Rail employees, that purchased British Rail Engineering Limited (BREL), the formerly state-owned manufacturing arm of British Rail. BREL was the first division of British Rail to be privatised as part of a phased plan initiated by the third Thatcher ministry. ABB took over two rolling stock manufacturing facilities from BREL; the Derby Litchurch Lane Works and York Carriage Works. Additionally, ABB took over Crewe Works in a purely maintenance capacity. During September 1992, ABB Group purchased the stakes of the other members of the consortium to become the sole owner with the business rebranded ABB Transportation.
The first trains produced at either facility under ABB ownership were for an order for 22 three-carriage Class 320 electric multiple units, built at ABB York for Glasgow's suburban railways in 1990. That same year, ABB York finished an order for five similar four-car Class 322 units for the new Stansted Express service. Between 1990 and 1991, ABB York built 24 two-car Class 456 third rail trains for Network SouthEast services out of London Waterloo. A further order for 97 four-car Class 465 units was completed at ABB York for Network SouthEast services in and around Kent between 1991 and 1994. Numerous diesel multiple units were also built at ABB York, including 76 Class 165 suburban units for Chiltern Main Line and Great Western Main Line commuter services between 1990 and 1992, followed by 21 Class 166 three-car express units for longer-distance services out of London Paddington.
After initially focusing its resources on rolling stock refurbishment, the first new trains to roll off the production line at ABB Derby were the ten two-car Class 482 trains, built for the Waterloo & City line while it was still under the control of Network SouthEast (since transferred to the London Underground). In 1995, ABB Derby built 16 four-car Class 325 electric freight multiple units for the Royal Mail to replace their ageing fleet of parcels carriages. During the mid-1990s, in a bid to expand their international portfolio, both the Derby and York plants completed a number of ABB Eurotram light rail vehicles for the Strasbourg tramway in France. Around the same time, in a further diversification, ABB partnered with Brush Traction to construct the fleet of 46 Class 92 electric locomotives for hauling freight trains through the Channel Tunnel; ABB were involved in the design and construction of many components including the traction motors, while final assembly took place at Brush Works in Loughborough.
The last trains to roll off the production line at ABB York were an order for 41 four-carriage Class 365 electric multiple units for Connex South Eastern and West Anglia Great Northern services between 1994 and 1995. Following the privatisation of British Rail, ABB encountered a decline in train orders, largely due to increased competition from competing manufacturers and no longer having a monopoly on rolling stock production in the British market. Thus the business was rationalized; ABB York was closed in 1996 (it would later be reopened as a rail wagon manufacturing center by the Thrall Car Manufacturing Company) and all manufacturing activity was relocated to ABB Derby, the operation of which was transferred to the Adtranz joint venture between ABB and Daimler in 1996.
During 1997, Adtranz unveiled the Class 168 train for Chiltern Railways. The design of the Class 168 would subsequently be further developed into the Turbostar and Electrostar families of trains, which in turn became the most successful rolling stock design on post-privatization British railways by number of units sold. During 1999, ABB sold its 50% stake in Adtranz to Daimler for $472 million, thus exiting the rolling stock manufacturing sector. Shortly thereafter, Daimler sold the Adtranz unit to Bombardier Transportation.
Controversy and litigation
In December 2022, ABB was charged by the U.S. Securities and Exchange Commission (SEC) for violations of the Foreign Corrupt Practices Act (FCPA) in a bribery scheme in South Africa. It was ordered to pay a total of $460 million to U.S. authorities to settle criminal and civil charges. ABB paid more than $37 million in bribes to a high-ranking Eskom official to influence contracts awarded by the state-owned electric utility company for work on the Kusile Power Station project between 2014 and 2017. The official had influence over the awarding of contracts for power projects in the country. In exchange for the bribes, ABB secured a $160 million contract to provide services related to cabling and installation work at Eskom's Kusile Power Station, one of the largest coal-fired power plants in the world.
In a parallel case, the DOJ fined ABB $315 million to settle criminal charges. ABB had to pay $75 million in civil penalties to settle the SEC's charges. It was fined 4 million Francs by Swiss authorities. ABB also agreed to repay $104 million to Eskom it was paid in connection with Kusile.
In January 2024, the United States House Committee on Homeland Security and the United States House Select Committee on Strategic Competition between the United States and the Chinese Communist Party announced an investigation into ABB regarding equipment sold to Chinese state-owned crane manufacturer ZPMC.
Overview
Company type: Public
Traded as:
SIX: ABBN
Nasdaq Stockholm: ABB
OTC Pink: ABBNY
SMI component
OMX Stockholm 30 component
ISIN CH0012221716
Industry: Electrical equipment
Predecessors
Allmänna Svenska Elektriska Aktiebolaget (Asea) / Brown, Boveri & Cie
Founded 1988; 36 years ago
Headquarters:
Västerås, Sweden
Zürich, Switzerland
Area served: Worldwide
Key people:
Peter Voser (chairman)
Björn Rosengren (CEO)
Revenue Increase: US$32.2 billion (2023)
Operating income: Increase US$4.87 billion (2023)
Net income Increase: US$3.82 billion (2023)
Total assets Increase: US$40.9 billion (2023)
Total equity Increase: US$14.1 billion (2023)
Owners:
Investor AB (10%)
Cevian Capital (5%)
(as of February 2023)
Number of employees: c. 105,000 (2023)
Website: global.abb