ALSTOM completes the repositioning of its Energy
sector

· The way forward to major consolidation in the power
generation industry

· ALSTOM becomes joint owner of a world leader in the
power generation industry

· ALSTOM becomes joint owner of a world-class heavy duty
gas turbine technology

ALSTOM today completed the repositioning of its Energy sector
by merging its power generation-related activities with those
of ABB, forming a 50/50 Joint Company, ABB ALSTOM POWER.

This move follows the sale by ALSTOM, on 25 June, of its
GE-licensed heavy duty gas turbine business to GE Power
Systems.

All regulatory approvals have been obtained and the deal was
formally closed in Amsterdam today with ABB receiving a cash
payment from ALSTOM of $1.5 billion (approximately 1.4 billion
euros) in order to reach the 50/50 arrangement, compensating
for the difference in the size of the contributed businesses,
as announced on 23 March1999.

ABB ALSTOM POWER, a Dutch-incorporated company, initially
headquartered in Brussels begins operations today under the
management of Claude Darmon who will relinquish his current
position as Deputy CEO and Chief Operating Officer of ALSTOM to
become the first President and Chief Executive Officer of the
joint company. Joining him on the Management Board as Executive
Vice Presidents are Alexis Fries and Nick Salmon as well as
Chief Financial Officer, Peer-Hakon Jensen. The six-member
Supervisory Board comprises Göran Lindahl, President and
CEO of ABB as Chairman, Pierre Bilger, Chairman and CEO of
ALSTOM, James Cronin and François Newey also of ALSTOM and
Renato Fassbind and Armin Meyer of ABB.

With 58 000 employees in over 100 countries worldwide, the
new company had combined 1998 sales of 9.9 billion euros (at
1998 exchange rate) and a fiscal year matching the calendar
year. ABB ALSTOM POWER will provide its first full financial
statements at December 1999.

' Today, ALSTOM becomes joint owner of a world leader in the
energy field and joint owner of a well-established, world-class
heavy duty gas turbine technology. ALSTOM's management is very
positive about this strategic move and delighted by the
reaction we have received from our customers around the globe,
' said Pierre Bilger, Chairman and Chief Executive Officer of
ALSTOM. ' The creation of ABB ALSTOM POWER allows ALSTOM to
participate further, on a greater scale than before, in the
steady growth of the world energy market, a market in which
ALSTOM and its predecessors have built up solid skills,
experience and reputation over many decades. Our participation
in a joint power company with ABB in no way dilutes our
commitment to the energy business, which remains core to
ALSTOM's future strategy.'

As of 1 July 1999, ALSTOM will account proportionally for ABB
ALSTOM POWER, taking 50% of the new company's financial results
into its own financial statements. Going forward, Energy will
represent approximately 35% of ALSTOM's total activity.

ALSTOM expects the deal to be earnings enhancing by 2000/01
as a result of the synergy effects which will lead to savings
of 500 - 600 million euros in the fourth year.

Additionally, in 1999/00, ALSTOM will record a capital gain
of approximately 550 million euros resulting from the sale of
its heavy duty gas turbine business to GE and an exceptional
post-tax charge of approximately 230 million euros
corresponding to its 50% share of the 700 million euros
restructuring provision which will be included in the balance
sheet of ABB ALSTOM POWER.

Going forward, ALSTOM continues to position itself as the
preferred solution provider to the world's energy and transport
infrastructure markets. ALSTOM's three main businesses, Energy
(via its 50% share in ABB ALSTOM POWER), Transmission &
Distribution and Transport will represent over 75% of the
Company's total activity with Marine, Contracting and a
refocused Industry sector completing ALSTOM's portfolio.