ABB AG Exchange Offer

a
 Public Exchange Offer
of

New ABB Ltd

for all

Registered Shares in ABB AG with a nominal value of CHF 10 each

and all

Bearer Shares in ABB AG with a nominal value of CHF 50 each

Offer Period: March 31 to May 04, 1999, 4 p.m. Central European Time

Exchange Ratio: 1 ABB AG registered share with a nominal value of CHF 10

will be exchanged for
3.242 New ABB Ltd registered shares with a nominal value of CHF 10
each.

1 ABB AG bearer share with a nominal value of CHF 50

will be exchanged for
16.210 New ABB Ltd registered shares with a nominal value of CHF 10
each.

Offeror: The offeror for all issued and outstanding shares of ABB AB and ABB AG
has been incorporated under the name “New ABB Ltd”, but will change
its name to “ABB Ltd” following the Exchange Offer consummation. For
simplification, the offeror in this Exchange Offer Prospectus will be called
“New ABB Ltd”.

CREDIT SUISSE FIRST BOSTON

Registered shares Bearer shares

Security number ISIN Security number ISIN
New ABB Ltd 384 662 CH 000 384 662 0 – –
New ABB Ltd (fractions) 384 672 CH 000 384 672 9 – –
ABB AG shares not notified for exchange 625 431 CH 000 625 431 9 625 432 CH 000 625 432 7
ABB AG shares notified for exchange (2nd line) 384 598 CH 000 384 598 6 384 583 CH 000 384 583 8

Exchange Offer Prospectus of March 26, 1999

United States of America Sales Restriction

The public exchange offer referred to in this document is not being made, directly or indirectly, in or into the United
States, and neither this Exchange Offer Prospectus nor the accompanying form of Declaration of Acceptance and
Assignment are being or may be mailed or otherwise forwarded, distributed or sent in, into or from the United
States. The shares of New ABB Ltd to be issued pursuant to the public exchange offer have not been registered
under the U.S. Securities Act of 1933 (the “Securities Act”) or under any relevant securities laws of any state of
the United States. Accordingly, the shares of New ABB Ltd may not be offered, sold or delivered, directly or
indirectly, in or into the United States or to or for the account or benefit of any U.S. person except in transactions
exempt from, or not subject to, the registration requirements of the Securities Act and otherwise in accordance
with all applicable legislation.

Except in limited circumstances the exchange offer may be accepted only outside the United States.

United Kingdom

This Exchange Offer Prospectus also comprises part of the listing particulars prepared for the purpose of the appli-
cation to admit the shares of New ABB Ltd to the Official List of the London Stock Exchange Limited. A copy of
those listing particulars has been delivered to the Registrar of Companies in England and Wales in accordance
with Section 149 of the Financial Services Act 1986.

Other Jurisdictions

This Exchange Offer Prospectus may not be issued or distributed or passed on to a person resident in a country
or jurisdiction where such issuance, publication or distribution would be considered unlawful.

In the case of inconsistencies between the English original and the German and French translation thereof, the
English version shall prevail.

2
A. New ABB Ltd: The Exchange Offer in the context of the
planned structure
The Boards of Directors of ABB Asea Brown Boveri Ltd of Switzerland, ABB AB of Sweden and ABB AG of
Switzerland announced on February 4, 1999, that they had unanimously approved a plan to create a unified, single-
class ABB share. The new single-class share will replace the current four classes of shares of ABB AB and ABB
AG, all of which have different voting rights, with a “one share, one vote” structure.

The ABB Group was formed on January 5, 1988 as a result of the merger between Sweden’s Asea AB and
Switzerland’s BBC Brown Boveri AG. The merger was achieved through a twin-headed structure: ABB AB (for-
mer Asea AB) and ABB AG (former BBC Brown Boveri AG) each hold 50 percent of ABB Asea Brown Boveri
Ltd, Zurich (Switzerland), the parent company of the ABB Group. The twin parent companies hold no significant
assets, and receive no significant income, other than from their respective 50 percent share in the ABB Group’s
income and equity.

ABB AG ABB AB
Shareholders Shareholders

100% 100%

ABB AG ABB AB

50% 50%

ABB Asea Brown Boveri Ltd

Zurich, Switzerland

Currently, ABB AB and ABB AG together have four classes of shares issued:

Nominal Value Votes per Share Shares Outstanding

ABB AB Series A SEK 5 1 668,197,570
ABB AB Series B SEK 5 0.1 269,715,450
ABB AG registered CHF 10 1 5,470,750
ABB AG bearer CHF 50 1 8,159,470

ABB AB has no restriction as to share ownership. The ABB AG registered shares are currently subject to a limi-
tation on their voting rights set forth in the Articles of Incorporation.

Following implementation of the single-class share structure, a new entity “New ABB Ltd” will be the parent com-
pany for all activities of the ABB Group, and will thus “de facto” replace the current holding companies ABB AB
and ABB AG:
Former ABB AG Former ABB AB
Shareholders Shareholders

50%* 50%*

New ABB Ltd

Zurich, Switzerland

100%* 100%*

ABB Participation AG ABB Participation AB

Baden, Switzerland Västerås, Sweden

50%* 50%*

ABB Asea Brown Boveri Ltd

Zurich, Switzerland

*Assumes full acceptance of the Exchange Offers

3
Each of ABB AB and ABB AG currently holding 50 percent of the share capital of ABB Asea Brown Boveri Ltd
will be placed under the common ownership of New ABB Ltd which in turn will be owned by the former share-
holders of ABB AB and ABB AG in identical proportions as follows:

Current ABB AG Current ABB AG Exchange Ratio Corresponding Percent of

and ABB AB and ABB AB (Number of New ABB Number of New Share Capital
Share Classes Shares Ltd shares issued per ABB Ltd Shares * and Votes *
outstanding tendered Share)
ABB AB Series A 668,197,570 0.1599308 106,865,372 35.6
ABB AB Series B 269,715,450 0.1599308 43,135,807 14.4

Subtotal 150,001,179 50.0

ABB AG registered 5,470,750 3.242 17,736,171 5.9

ABB AG bearer 8,159,470 16.210 132,265,008 44.1

Subtotal 150,001,179 50.0

Total 300,002,358 100.0
* Assumes full acceptance of the Exchange Offers

To implement the new structure, New ABB Ltd will launch Exchange Offers for all issued and outstanding shares
of ABB AB and ABB AG, respectively. At their respective Annual General Meetings held on March 18, 1999, the
shareholders of ABB AB and ABB AG showed their support to the creation of this single-class share structure.

As part of the plan to create a single-class share structure New ABB Ltd and ABB AB intend to establish a
Dividend Access Facility for shareholders with tax residence in Sweden. This Dividend Access Facility is designed
to enable these shareholders to receive dividends in SEK from ABB AB (to be called ABB Participation AB after
completion of the Exchange Offers) without deduction of Swiss withholding tax. Implementation of the program is
subject to a positive outcome of the appeal proceedings pending before the Swedish Supreme Administrative
Court.

Application will be made to list the shares of New ABB Ltd on the Swiss Exchange SWX, on the Stockholm Stock
Exchange, on the Frankfurt Stock Exchange and on the London Stock Exchange.

In addition to the above, the shareholders of ABB AB and ABB AG also approved at their respective Annual
General Meetings a name change (conditional on the consummation of the Exchange Offers). The new parent
company of the ABB Group, referred to as “New ABB Ltd” in this Exchange Offer Prospectus, will change its
name into “ABB Ltd” (ABB AG) (ABB SA) following the consummation of the Exchange Offers. To enable the new
holding company to bear the name “ABB Ltd”, the shareholders of the present ABB AG therefore approved a
name change of the present ABB AG into “ABB Participation AG”. Likewise, the shareholders of ABB AB
approved a name change of ABB AB into “ABB Participation AB”.

Finally, the shareholders of ABB AG approved a special dividend in the amount of approximately CHF 278 million,
or CHF 30 (gross) per bearer share and CHF 6 (gross) per registered share. This special dividend serves to
equalize the differing net cash positions of ABB AG and ABB AB and will be paid once the Exchange Offers have
become unconditional.

4
B. Exchange offer
1. Offer The Exchange Offer of New ABB Ltd extends to all 5,470,750 ABB AG regis-
tered shares and all 8,159,470 ABB AG bearer shares.

2. Exchange Ratio 1 ABB AG registered share with a nominal value of CHF 10

will be exchanged free of charge (shares held in a safekeeping account at banks
in Switzerland) for

3.242 New ABB Ltd registered shares with a nominal value of CHF 10
each.

1 ABB AG bearer share with a nominal value of CHF 50

will be exchanged free of charge (shares held in a safekeeping account at banks
in Switzerland) for

16.210 New ABB Ltd registered shares with a nominal value of CHF 10
each.

New ABB Ltd has submitted an application to the Swiss Exchange SWX for the
listing of its registered shares no later than the first trading day following the entry
of New ABB Ltd’s capital increase in the Commercial Register.

The Board of Directors of ABB AG reserves the right to apply for the delisting of
the ABB AG registered and bearer shares once the Exchange Offer has been
completed.

The price trend of ABB AG registered and bearer shares on the Swiss Exchange
is as follows (in CHF, adjusted in line with the changes in capital):

ABB AG registered shares 1994 1995 1996 1997 1998 1999*

High 244 264 323 485 523 392
Low 186 195 255 313 250 295

ABB AG bearer shares 1994 1995 1996 1997 1998 1999 *

High 1,305 1,368 1,634 2,427 2,575 1,959
Low 993 1,000 1,311 1,610 1,230 1,481

Closing price on March 24, 1999: *01.01. – 24.03.1999

CHF 384 for registered shares and CHF 1,919 for bearer shares
Source: Datastream

3. Offer Period The Exchange Offer will be valid from March 31 to May 04, 1999, 4 p.m.
Central European Time.
The Board of Directors of New ABB Ltd reserves the right to extend the offer
period one or more times. The extension of the offer period by more than forty
trading days requires the prior consent of the Takeover Board.

4. Additional The offer period will be extended by ten trading days.

Acceptance Period

5. Procedure The exchange of ABB AG registered and bearer shares for New ABB Ltd
registered shares will be completed after all the conditions have been fulfilled or
waived. Section 6 below is reserved.

6. Conditions/ The Exchange Offer is conditional on the following:

Right of Withdrawal
a) Within the offer period, New ABB Ltd will be offered shares representing
more than 90 percent of the voting rights and more than 90 percent of the
share capital of ABB AG, including those held by ABB AG.

5
 Condition (a) constitutes a condition precedent as defined by Art. 13 para. 1
of the Ordinance of the Takeover Board on Public Takeover Offers (herein-
after referred to as “O-TB”).

b) Within the (possibly extended) offer period of the Exchange Offer to ABB AB
shareholders to exchange their shares in New ABB Ltd shares, New ABB Ltd
will be offered shares representing more than 90 percent of the votes and
share capital of ABB AB.

c) The responsible Swiss and foreign antitrust authorities (among others the
Swiss Cartel Commission, the Commission of the European Community, the
Federal Trade Commission) all having issued the required authorization
and/or clearance certificates for the completion of the new structure, or all
waiting periods under applicable antitrust laws having lapsed without any
action having been taken by any such authority.

d) The ABB AG Exchange Offer in the opinion of New ABB Ltd, prior to the
announcement that the ABB AG Exchange Offer will be implemented, is not
rendered partly or wholly impossible or significantly impeded as the result of
legislation, a court decision, action of a public authority or a comparable cir-
cumstance in Switzerland, Sweden or in any other country that has occured
or is expected to occur or by any other circumstance beyond the control of
New ABB Ltd.

Until expiry of the (possibly extended) offer period, conditions (b), (c) and (d) will
constitute conditions precedent according to Art. 13 para. 1 O-TB. Following the
expiry of the (possibly extended) offer period, conditions (b), (c) and (d) will
constitute conditions subsequent according to Art. 13 para. 4 O-TB.

Should the conditions mentioned under (a), (b), (c) or (d) not have been fulfilled
by the end of the (possibly extended) offer period or have not been waived with
effect for this Exchange Offer, the Board of Directors of New ABB Ltd is entitled
to:

(i) declare that the Exchange Offer has been successful but postpone the
implementation of the Exchange Offer; or

(ii) extend the offer period for a specified period; the Board of Directors must
consult with the Takeover Board if the offer period should exceed forty trading
days; or

(iii) declare that the Exchange Offer has failed.

Finally, the Exchange Offer will lapse if conditions (b), (c) and (d) have not been
fulfilled by November 30, 1999 and have not been waived with effect for this
Exchange Offer.

ABB AG shareholders who have notified their shares for exchange into
New ABB Ltd shares may not withdraw their acceptances unless the Exchange
Offer is prohibited by a competent court or administrative agency, or unless a
competing offer is made.

7. Entry in the Share ABB AG shareholders who are registered in the share register of ABB AG
Register of at the time of the exchange process will automatically be entered as share-
New ABB Ltd holders with voting rights in the share register of New ABB Ltd. It will not be
necessary to submit an application for entry. Where shareholders are entered
without voting rights in respect of that part of their shareholding, which exceeds
8.7 percent of total registered shares issued according to Art. 6, clause 3 of the
Articles of Incorporation of ABB AG, that part will henceforth be entered in the
share register of New ABB Ltd as shares with voting rights. The currently applic-

6
able 8.7 percent restriction on voting rights of ABB AG shareholders has not
been incorporated in the Articles of Incorporation of New ABB Ltd.

Art. 5 of the Articles of Incorporation of New ABB Ltd provides, however, that
holders of registered shares may be registered as shareholders without voting
rights if, upon request of the company, they do not expressly declare that the
shares were purchased for their own account. Furthermore, Art. 5 of the Articles
of Incorporation of New ABB Ltd provides that persons who fail to expressly
declare in their registration applications that they hold the shares for their own
account (“Nominees”) shall be registered as shareholders with voting rights only
if the Nominee has entered into an agreement with the Board of Directors-
concerning his status and is subject to a recognized bank or financial market
supervision. Notwithstanding the above, acquirors of registered shares may be
registered in the share register with Värdepapperscentralen VPC AB in
accordance with applicable Swedish law.

ABB AG bearer shareholders and ABB AG registered shareholders who are not
registered in the share register of ABB AG at the time of the exchange process
will be entered as shareholders with voting rights in the share register of New
ABB Ltd for all their registered shares of New ABB Ltd upon having submitted
a duly completed application for entry.

7
C. Information on the Offeror
1. Information on Name, domicile and duration of the company
New ABB Ltd (excerpt from Art. 1 and Art. 3 of the Articles of Incorporation)

Under the name New ABB Ltd, New ABB AG, New ABB SA (referred to as New
ABB Ltd in this Exchange Offer Prospectus) there exists a corporation with its
place of incorporation in Zurich.

The duration of the Company shall be unlimited.

Purpose
(excerpt from Art. 2 of the Articles of Incorporation)

The purpose of New ABB Ltd is to hold interests in business enterprises,

particularly in enterprises active in the areas of industry, trade and services.

New ABB Ltd may acquire, encumber, exploit or sell real estate and intellectual
property rights in Switzerland and abroad and may also finance other companies.

New ABB Ltd may engage in all types of transactions and may take all measures
that appear appropriate to promote, or that are related to, the purpose of New
ABB Ltd.

Share capital
(excerpt from Art. 4 of the Articles of Incorporation)

The share capital of New ABB Ltd entered in the Commercial Register of the
canton of Zurich currently amounts to CHF 100,000 divided into 10,000
registered shares with a nominal value of CHF 10 each. Once both Exchange
Offers to the shareholders of ABB AG and ABB AB have been completed
assuming full acceptance of both Exchange Offers, the share capital of New
ABB Ltd shall amount to CHF 3,000,023,580 divided into 300,002,358 fully paid
registered shares with a nominal value of CHF 10 each. The Articles of
Incorporation will also make provision for the following:

Authorized Share Capital

The Board of Directors shall be authorized to increase the share capital in an

amount not to exceed CHF 100,000,000 through the issuance of up to
10,000,000 fully paid registered shares with a nominal value of CHF 10 per
share by not more than [2 years following the resolution of the General Meeting
of Shareholders]. An increase in partial amounts shall be permitted.

The subscription and acquisition of the new shares, as well as each subsequent
transfer of the shares, shall be subject to the restrictions of Art. 5 of the Articles
of Incorporation.

The Board of Directors may issue new shares by means of a firm underwriting
through a banking institution or syndicate and a subsequent offer of these shares
to the current shareholders. The Board of Directors may permit pre-emptive
rights that have not been exercised to expire or it may place these rights and/or
shares as to which pre-emptive rights have been granted but not exercised, at
market conditions.

The Board of Directors is further authorized to restrict or deny the pre-emptive

rights of shareholders and allocate such rights to third parties if the shares are to
be used:

8
a) for the acquisition of an enterprise, parts of an enterprise or participations, or
in case of a share placement, for the financing of such transactions; or

b) for the purpose of broadening the shareholder constituency in connection

with a listing of shares on domestic or foreign stock exchanges.

Furthermore, the Board of Directors shall be authorized to increase the share

capital in an amount not to exceed CHF 300,002,360 through the issuance of up
to 30,000,236 fully paid registered shares with a nominal value of CHF 10 per
share by not more than [2 years following the resolution of the General Meeting
of Shareholders]. An increase in partial amounts shall be permitted. The sub-
scription and acquisition of the new shares, as well as each subsequent transfer
of the shares, shall be subject to the restrictions of Art. 5 of the Articles of
Incorporation. The pre-emptive rights of shareholders shall be revoked with
respect to shares issued pursuant to this paragraph. The issued shares may only
be used as consideration for, or in connection with the financing of, the purchase
of shares of former ABB AG, in Baden and ABB AB, in Västerås, in case not all
of the shares are exchanged within the scope of the Exchange Offers of New
ABB Ltd for the shares of former ABB AG and ABB AB.

Contingent Share Capital

The share capital may be increased in an amount not to exceed

CHF 100,000,000 by the issuance of up to 10,000,000 fully paid registered
shares with a nominal value of CHF 10 per share through the exercise of
conversion rights and/or warrants granted in connection with the issuance on
national or international capital markets of bonds or similar debt instruments by
New ABB Ltd or one of its group companies and/or through the exercise of
warrant rights granted to the shareholders. The pre-emptive rights of the share-
holders shall be excluded in connection with the issuance of convertible or
warrant-bearing bonds or similar debt instruments. The then current owners of
conversion rights and/or warrants shall be entitled to subscribe for the new
shares.

The acquisition of shares through the exercise of conversion rights and/or

warrants and each subsequent transfer of the shares shall be subject to the
restrictions of Art. 5 of the Articles of Incorporation.

In connection with the issue of convertible or warrant-bearing bonds or similar

debt instruments, the Board of Directors shall be authorized to restrict or deny
the advance subscription rights of shareholders if such debt issues are for the
purpose of financing the acquisition of an enterprise, parts of an enterprise, or
participations.

The share capital may be increased in an amount not to exceed

CHF 100,000,000 through the issuance of up to 10,000,000 fully paid regis-
tered shares with a nominal value of CHF 10 per share by the issuance of new
shares to employees of New ABB Ltd and group companies. The pre-emptive
and advance subscription rights of the shareholders of New ABB Ltd shall
thereby be excluded. The shares or rights to subscribe for shares shall be issued
to employees pursuant to one or more regulations to be issued by the Board of
Directors, taking into account performance, functions, levels of responsibility and
profitability criteria.

The acquisition of shares within the context of employee share ownership and
each subsequent transfer of the shares shall be subject to the restrictions of Art.
5 of the Articles of Incorporation.

9
Share Vote, Share Register, Nominees
(excerpt from Art. 5 and Art. 16 of the Articles of Incorporation)

Each New ABB Ltd registered share entitles its holder to one vote. Acquirors of
registered shares shall be registered upon request in the share register as
shareholders with the right to vote, provided that they expressly declare that they
acquired the registered shares in their own name and for their own account.

The 8.7 percent entry and voting rights restriction contained in the current
Articles of Incorporation of ABB AG has not been incorporated in the Articles of
Incorporation of New ABB Ltd.

If persons fail to expressly declare in their registration applications that they hold
the shares for their own account (the “Nominees”), the Board of Directors shall
enter such persons in the share register with the right to vote, provided the
Nominee has entered into an agreement with the Board of Directors concerning
his status and is subject to a recognized bank or financial market supervision.

Notwithstanding the above, acquirors of registered shares may be registered in

the share register with Värdepapperscentralen VPC AB in accordance with
applicable Swedish law.

Share Certificates
(excerpt from of Art. 6 of the Articles of Incorporation)

The shareholder may at any time request New ABB Ltd to issue a confirmation
of the number of registered shares held by such shareholder. The shareholder is
not entitled, however, to request the printing and delivery of certificates for
registered shares. New ABB Ltd may, on the other hand, at any time print and
deliver certificates for registered shares, and may, with the consent of the
shareholder destroy issued certificates that are delivered to it, without replace-
ment.

Activity

ABB is a global engineering and technology group serving customers in electric

power generation, transmission and distribution; automation; oil, gas and petro-
chemicals; industrial products and contracting; and financial services.

The ABB Group employs some 200,000 people in more than 100 countries around
the world. In 1998, the ABB Group reported orders worth over USD 30 billion,
operating earnings (after depreciation) of more than USD 2.1 billion and net income
after taxes and minority interests of over USD 1.3 billion.

The ABB Group has a total of about 1,000 companies around the world, divided
into six industrial business segments and financial services, which together cover
33 business areas. Each business area has global responsibility for its business
strategies, manufacturing operations and product development within its
technology areas.

10
Board of Directors of New ABB Ltd

The Board of Directors of the new listed single parent company retains
overall corporate responsibility for the ABB Group and shall consist of no
less than 7 and no more than 13 members. The following individuals are
nominated for election to the Board of Directors (Name, Nationality):

Percy Barnevik, Swedish

Gerhard Cromme, German
Jürgen Dormann, German
Martin Ebner, Swiss
Robert Jeker, Swiss
Yotaro Kobayashi, Japanese
Göran Lindahl, Swedish
Agostino Rocca, Italian
Donald Rumsfeld, United States
Edwin Somm, Swiss
Peter Sutherland, Irish
Jacob Wallenberg, Swedish

The proposed Board of Directors intends to elect Mr. Percy Barnevik as

Chairman and Mr. Robert Jeker as Vice Chairman of New ABB Ltd. The term
of office of the members of the Board of Directors shall be one year.
Members of the Board of Directors whose term of office have expired shall
be immediately eligible for re-election.

Management of the ABB Group

The Group Executive Management of the ABB Group consists of the

following individuals:

Göran Lindahl, President and Chief Executive Officer

Renato Fassbind, Chief Financial Officer
Alex Fries, Business Segment Power Generation
Sune Karlsson, Business Segments Power Transmission
and Power Distribution
Jörgen Centerman, Business Segment Automation
Gorm Gundersen, Business Segment Oil, Gas and Petrochemicals
Armin Meyer, Business Segment Products and Contracting
Jan Roxendal, Business Segment Financial Services

The ABB Group will keep its current management structure and organization,
and the Group’s headquarter will remain in Zurich, Switzerland.

Major Shareholders of ABB AG and ABB AB

In present ABB AG, on December 31, 1998 the shareholders known by the
company to hold more than 5 percent of the voting rights or capital of ABB
AG were:

• Unotec Holding AG, Glarus, together with affiliated companies, held

1,762,065 registered shares, which corresponds to 12.9 percent of total
voting rights.
• Stillhalter Vision AG, Wilen, held 1,394,058 registered shares
representing 10.2 percent of total voting rights. Of this total only 3.5 per-
cent are recorded in the share register as shares with voting rights, due
to the restrictions in the articles of incorporation.

11
 In ABB AB, the majority of non-Swedish owners are registered in the name
of nominees; therefore many actual foreign owners are not officially
registered. The following shareholders are known by the company to hold
more than 5 percent of the voting rights or 5 percent of the capital of ABB
AB as per December 31, 1998:

• Including owners registered in the name of nominees, BZ Bank AG is the

largest non-Swedish shareholder with 12.9 percent of the share capital
and 8.8 percent of the voting rights.
• Investor AB holds 9.9 percent of the share capital and 13.4 percent of the
voting rights.
• The Fourth National Pension Insurance Fund of Sweden holds 6.9 per-
cent of the share capital and 9.3 percent of voting rights.

Persons Acting in Concert

In the context of this Exchange Offer, the following persons are acting in
concert with New ABB Ltd:

• ABB AG
• ABB AB
• ABB Asea Brown Boveri Ltd, and all the companies under ABB Asea
Brown Boveri Ltd’s control

Consolidated Annual Financial Statements of

ABB Asea Brown Boveri Ltd

ABB AG’s annual financial statements for 1998 and the consolidated
financial statements of ABB Asea Brown Boveri Ltd for 1998 are published
in the Annual Report. Copies of the Annual Report and the Shareholders’
Circular can be obtained free of charge at the address mentioned at the end
of this Exchange Offer Prospectus. Since New ABB Ltd was incorporated
only in 1999 no annual financial statements exist.

2. New ABB Ltd’s, At the time of publishing this Exchange Offer, New ABB Ltd does not hold
ABB AG’s and any shares in ABB AG.
ABB AB’s holding
in ABB AG As at March 19, 1999, ABB AG and all companies acting in concert with it
held 9,765 ABB AG registered shares and 213,957 ABB AG bearer shares,
constituting 2.33 percent of the entire issued capital of CHF 462,681,000
and 1.64 percent of the votes of ABB AG. ABB AG and all companies acting
in concert with it do not hold any convertible bonds which can be exchanged
into ABB AG registered or bearer shares, or call or put options for ABB AG
registered or bearer shares.

The Exchange Offer extends over the 5,460,985 publicly held ABB AG
registered shares and the 7,945,513 publicly held ABB AG bearer shares as
well as all 9,765 registered shares and all 213,957 bearer shares held by
ABB AG and the companies under their control, a total of 5,470,750
registered shares with a nominal value of CHF 10 each and a total of
8,159,470 bearer shares with a nominal value of CHF 50 each.

3. Listing on the Swiss New ABB Ltd has submitted an application to the Swiss Exchange SWX for the
Exchange SWX listing of its registered shares no later than the first trading day following the
entry of New ABB Ltd’s capital increase in the Commercial Register.

12
D. Financing
The New ABB Ltd registered shares necessary for the share exchange will be created by means of a capital
increase in the form of a contribution in kind. At its meeting of February 3, 1999, the Board of Directors of ABB
AG committed to procure for the increase of the share capital of New ABB Ltd in case of the completion of both
Exchange Offers to the shareholders of ABB AB and ABB AG, respectively, from CHF 100,000 up to a maximum
of CHF 3,000,023,580.

E. Information on the Target Company

Intentions of New ABB Ltd with regard to ABB AG

It is the intention that ABB AG, to be named ABB Participation AG upon successful completion of the Exchange
Offers, will continue to be an intermediate holding company, holding 50 percent of ABB Asea Brown Boveri Ltd.

Agreements between New ABB Ltd and ABB AG, its Governing Bodies and Shareholders

There are no agreements in place between New ABB Ltd and ABB AG, its governing bodies and shareholders,
other than the Master Agreement dated February 3, 1999, among New ABB Ltd, ABB AG and ABB AB providing
for the process for the creation of the single-share structure.

Agreements between ABB AG and ABB AB

On January 1, 1988, ABB AG (formerly BBC Brown Boveri AG) and ABB AB (formerly Asea AB) entered into a
Shareholders’ Agreement which was amended on February 27, 1996 and which governs the existing structure of
the ABB Group. This agreement will be terminated upon consummation of the Exchange Offers described herein.

Confidential Information

New ABB Ltd confirms that neither it nor the persons acting in concert with it have directly or indirectly received
confidential information on ABB AG from the company itself or from the companies under its control which could
cast a significantly different light on the Exchange Offer from the point of view of the public shareholders.

F. Publication
A summary of this Exchange Offer will be published in German in the Neue Zürcher Zeitung, Schweizerisches
Handelsamtsblatt, Finanz und Wirtschaft and Handelszeitung and in French in Le Temps and AGEFI. This
summary information will also be supplied to Telekurs, Bloomberg and Reuters.

G. Letter from Financial Advisor

Please refer to the appendix for the full text of the letter of Morgan Stanley Dean Witter, dated February 24, 1999.

13
H. Report of the Board of Directors of ABB AG
The Board of Directors of ABB AG has examined the exchange offers of New ABB Ltd to the shareholders of ABB
AG and to the shareholders of ABB AB as well as their modalities.

The Board of Directors of ABB AG considers the exchange offer to the shareholders of ABB AG as fair and
reasonable and in the best interest of ABB AG’s shareholders as a whole. The Board of Directors of ABB AG
unanimously recommends ABB AG’s shareholders to accept the Offer. One ABB AG registered share with a
nominal value of CHF 10 will be exchanged for 3.242 registered shares in New ABB Ltd with a nominal value of
CHF 10 each and one ABB AG bearer share with a nominal value of CHF 50 will be exchanged for 16.210
registered shares in New ABB Ltd with a nominal value of CHF 10 each. Based on the aforementioned exchange
ratios former shareholders of ABB AG will hold 50 per cent of the share capital of New ABB Ltd, once the ex-
change offers have become final and under the assumption that all shares have been exchanged.

Morgan Stanley Dean Witter delivered a letter, dated February 24, 1999, to the Board of Directors of ABB Asea
Brown Boveri Ltd, that it is reasonable for that Board to recommend to the Boards of Directors of ABB AG and
ABB AB that they, in turn, recommend to their respective shareholders acceptance of the exchange offers.

The Board of Directors of ABB AG is not aware of any contractual agreements or of other arrangements of its
members or of members of the senior management of ABB AG with New ABB Ltd, which might result in a con-
flict of interest. Furthermore, the Board of Directors of ABB AG is not aware of any particular intentions of the main
shareholders of ABB AG (Unotec Holding AG and Stillhalter Vision AG) relevant in relation to the exchange offer.

Baden, March 10, 1999 ABB AG

Board of Directors

Robert Jeker Christian Berner

Chairman Secretary

I. Report of the Review Body pursuant to Article 25 of the

Federal Act on Stock Exchanges and Securities Trading
As auditors recognised by the supervisory authority to review public takeover offers in accordance with the Federal
Act on Stock Exchanges and Securities Trading (hereinafter “SESTA”), we have reviewed the Exchange Offer
Prospectus and the summary provided for in Art 18 para 3 of the Ordinance of the Takeover Board on Public
Takeover Offers (hereinafter “O-TB”) pursuant to Article 25 of the SESTA and Article 26 of the O-TB taking into
consideration the exceptions granted by the Takeover Board.

The Exchange Offer Prospectus and the summary are the responsibility of the Board of Directors. Our responsi-
bility is to express an opinion on these two documents based on our review.

Our review was conducted in accordance with the standards promulgated by the profession, which require that a
review be planned and performed to verify the formal completeness in conformity with the SESTA and the O-TB
and to obtain reasonable assurance about whether the Exchange Offer Prospectus and the summary are free from
material misstatements. We have checked some of the material information thoroughly, some on a test basis.
Furthermore, we have verified the compliance with SESTA and O-TB. We believe that our review provides a
reasonable basis for our opinion.

Inour opinion:
• the Exchange Offer Prospectus and the summary comply with the SESTA and the O-TB;
• the present Exchange Offer Prospectus and the summary are complete and accurate;
• the recipients of the offer are treated equally;
• the ratio between the different classes of shares (bearer and registered shares of ABB AG) has been fixed
appropriately;
• New ABB Ltd has taken reasonable measures to have the New ABB Ltd registered shares required for the
exchange at its disposal and to make these available on the date of completion of the Exchange Offer.

Zurich, March 26, 1999 KPMG Klynveld Peat Marwick Goerdeler SA

Peter Hanimann Rudolf Züger

Certified Accountant Certified Accountant
14
J. Recommendation of the Takeover Board
The Exchange Offer was submitted to the Takeover Board prior to its publication. In the recommendation dated
March 26, 1999, the Takeover Board found as follows:

The offer of New ABB Ltd complies with the Stock Exchange Act.

The Takeover Board grants the following exemptions from the Takeover Ordinance (Art. 4): conditions subsequent
(Art. 13.4); waiver of the cooling-off period (Art. 14.1), extension of the execution time-limit (Art. 14.6), exemption
from the obligation to state the number of equity securities of the offeree bought and sold by the offeror and the
persons acting in concert with it in the twelve months preceding the offer (Art. 19.1 lit. g and Art. 12 lit. e), exemp-
tion from the obligation to value the unlisted securities offered in the exchange (Art. 24.5), exemption from the
notification of the interim and the final result within the respective period (Art. 43.1 and 43.2).

15
K. Execution of the Exchange Offer
1. Information/Submission Shareholders whose Shares are held in a Safekeeping Account
of Applications
Shareholders whose ABB AG registered or bearer shares are held in a safe-
keeping account will be informed of the Exchange Offer by the custodian bank
and are asked to proceed according to its instructions.

Shareholders who keep their Shares at Home

Shareholders who keep their ABB AG registered shares at home or in a bank

safe will be informed of the Exchange Offer by the share register of ABB AG.
Registered shareholders and bearer shareholders who keep their ABB AG
shares at home or in a bank safe are asked to complete and sign the form of
“Declaration of Acceptance and Assignment” and to submit it, along with the
corresponding share certificate(s) – with coupons no. 8 & ff (bearer shares) –
not invalidated, directly to their bank or an exchange agent by 4 p.m. Central
European Time on May 4, 1999 at the latest. The holder of coupon no. 7 of ABB
AG bearer shares will be entitled to retrieve the dividend as from April 12, 1999
while the special dividend will be paid against coupon no. 8 of ABB AG bearer
shares.

2. Offer Manager New ABB Ltd has commissioned Credit Suisse First Boston, Zurich, to handle
the execution of the Exchange Offer.

3. Exchange Agents in Switzerland:

Credit Suisse First Boston, Zurich
all branches of Credit Suisse in Switzerland

in Germany:
Credit Suisse First Boston AG, Frankfurt a.M.

in Austria:
Bank Austria Aktiengesellschaft, Vienna

4. Shares Notified ABB AG registered or bearer shares which have been notified for exchange for
for Exchange New ABB Ltd registered shares will be assigned the following security number
by the custodian banks:

ABB AG registered shares with a nominal value of CHF 10 each

Shares notified for exchange, security number 384 598.

ABB AG bearer shares with a nominal value of CHF 50 each

Shares notified for exchange, security number 384 583.

These security numbers must be used for safekeeping accounts and in dealings
with the Swiss Securities Clearing Corporation (SEGA) until such time as the
ABB AG registered and bearer shares notified for exchange are actually ex-
changed for New ABB Ltd registered shares.

5. Exchange Trading Trading in ABB AG registered and bearer shares on the Swiss Exchange SWX
during the offer period will be organized as follows:

ABB AG registered shares with a nominal value of CHF 10 each

• First line: Shares not notified for exchange

Security number: 625 431

• Second line: Shares notified for exchange

Security number: 384 598

16
 ABB AG bearer shares with a nominal value of CHF 50 each

• First line: Shares not notified for exchange

Security number: 625 432

• Second line: Shares notified for exchange

Security number: 384 583

Trading on the first line will take place under the name “ABB AG” up to the day
on which the capital increase of New ABB Ltd is entered in the Commercial
Register and under the name “ABB Participation AG” thereafter, while trading on
the second line commences on April 12, 1999 and ends on the day on which the
capital increase of New ABB Ltd is entered in the Commercial Register.

6. Exchange Until completion of this Exchange Offer, ABB AG will remain the sole shareholder
of New ABB Ltd. At its meeting of February 3, 1999, the Board of Directors of
ABB AG committed to procure for the increase of the share capital of New ABB
Ltd in case of the completion of both Exchange Offers to the shareholders of
ABB AB and ABB AG, respectively from CHF 100,000 up to a maximum of
CHF 3,000,023,580

• by issuing up to 149,991,179 registered shares with a nominal value of

CHF 10 each. The newly created shares will be paid up by a contribution in
kind of ABB AG registered and bearer shares notified for exchange in
exchange for the new New ABB Ltd registered shares by Credit Suisse First
Boston in its fiduciary capacity; and
• by issuing up to 150,001,179 registered shares with a nominal value of
CHF 10 each in case of the completion of the Exchange Offer to the share-
holders of ABB AB. The newly created shares will be paid by a contribution
in kind of ABB AB A-shares and B-shares notified for exchange in exchange
for New ABB Ltd registered shares by Skandinaviska Enskilda Banken AB in
its fiduciary capacity.

Once the share capital of New ABB Ltd has been increased, the capital increase
will immediately be entered in the Commercial Register. ABB AG registered
shares notified for exchange will be exchanged for New ABB Ltd registered
shares, changing its security number from 384 598 (registered shares notified
for exchange) to 384 662 (New ABB Ltd registered shares). ABB AG bearer
shares notified for exchange will be exchanged for New ABB Ltd registered
shares, changing its security number from 384 583 (bearer shares notified for
exchange) also to 384 662.

7. Rounding down Given the exchange ratio, if shareholders do not submit for exchange
of Fractional Shares • 500 ABB AG registered shares or a multiple thereof,
• 100 ABB AG bearer shares or a multiple thereof,

a fraction of a New ABB Ltd registered share will arise. Since fractions of New
ABB Ltd registered shares cannot be acquired, shareholders submitting frac-
tions of ABB AG registered and/or bearer shares will receive a cash payment for
fractional shares. For this purpose, the fixing of the value of one New ABB Ltd
registered share, serving as a basis for the payments of fractions, will be based
on the average closing price of New ABB Ltd registered shares (unweighted)
over a one week period on the Swiss Exchange starting on the first day of trading
of New ABB Ltd shares on the Swiss Exchange. Subsequently, Credit Suisse
First Boston will announce the binding uniform price of New ABB Ltd registered
shares for the cash payment of the fractions.

17
8. Charges and Taxes ABB AG registered and bearer shares held in safekeeping at Swiss banks will
be exchanged during the offer period and the additional acceptance period free
of cost and charges. Taxation will be governed by the following principles:

• The exchange of registered or bearer shares in the context of the Exchange

Offer is tax-free for Swiss Federal income tax purposes for individual share-
holders domiciled in Switzerland holding their shares as part of their private
property.
The same applies for the cantonal taxes in the cantons of Zurich and Aargau,
other cantons are expected to apply a similar treatment.

• The exchange of registered or bearer shares held as business assets by

shareholders, both legal entities and individuals, domiciled in Switzerland, is
tax-free as long as the book value for the shares disposed of is used as
acquisition value of the New ABB Ltd shares (“Buchwertfortführung”).

• The taxation of shareholders domiciled abroad will be subject to the relevant

foreign tax legislation. Shareholders are recommended to have their personal
tax situation examined.

9. Dividend Rights The newly issued registered shares of New ABB Ltd resulting from the public
Exchange Offer will rank for dividends from the issue date and are treated equal
to the existing New ABB Ltd registered shares.

ABB’s current dividend policy, calling for 30 to 50 percent of consolidated ABB

Group net income to be distributed to shareholders, will remain unchanged.

10. Special Dividend In order to equalize the asset values in ABB AG and ABB AB, the ABB AG
Board of Directors proposed and the shareholders meeting held on March 18,
1999, resolved that net excess cash in ABB AG in the amount of approximately
CHF 278 million will be paid out as a special dividend to ABB AG shareholders,
once the Exchange Offers have become unconditional. This represents a divi-
dend of CHF 30 gross per bearer share and CHF 6 gross per registered share
of ABB AG.

The special dividend will be paid to the shareholders of ABB AG after the end of
the additional acceptance period conditional upon acceptance of the Exchange
Offers of New ABB Ltd to the shareholders of ABB AG and ABB AB. The
payment is expected to be made on June 11, 1999, regardless whether the
shares have been tendered or not.

11. Delisting and The Board of Directors of ABB AG reserves the right to apply for the delisting of
Invalidation of the ABB AG registered and bearer shares once this Exchange Offer has been
ABB AG Registered completed.
and Bearer Shares
If New ABB Ltd holds more than 98 percent of the votes of ABB AG after this
Exchange Offer, New ABB Ltd will request the cancellation of the remaining
share certificates in accordance with Art. 33 of the Federal Act on Stock
Exchanges and Securities Trading against performance of the Exchange Offer for
the benefit of the holders of the cancelled shares.

12. Applicable Law and The Exchange Offer and all reciprocal rights and obligations resulting therefrom
Place of Jurisdiction shall be subject to Swiss law. The exclusive place of jurisdiction shall be the
Commercial Court of the Canton of Zurich (Handelsgericht des Kantons Zürich)
with reserve of appeals to the Swiss Federal Supreme Court (Bundesgericht).

18
L. Timetable
March 31, 1999 Start of the offer period

April 12, 1999 First trading day for ABB AG registered and bearer shares notified for exchange

May 04, 1999 End of the offer period*

May 11, 1999 Start of the additional acceptance period*

May 26, 1999 End of the additional acceptance period*

June 11, 1999 • Last Trading Day of ABB AG shares*

• Payment Date of Special Dividend to ABB AG shareholders

June 14, 1999 First Trading Day of New ABB Ltd*

* The Board of Directors of New ABB Ltd reserves the right to extend the offer period one or more times as
provided for in section B.3. “Offer period” and section B.6. “Conditions/Right of Withdrawal”. Subsequent dates
in such case will be changed accordingly.

Trading in New ABB Ltd registered shares will commence on the trading day following the entry of the capital
increase of New ABB Ltd in the Commercial Register.

The annual report of ABB AG, the Shareholders’ Circular and the Listing Particulars may be obtained free of
charge from the address below.

ABB AG
Share Register
P.O. Box
CH-5401 Baden
Switzerland
Fax: ++41 (0)56 222 1026

Bank responsible for handling the Exchange Offer:

Credit Suisse First Boston

19
(This page has been left blank intentionally.)

20
Appendix

21
22
23
(This page has been left blank intentionally.)

24
a
ABB AG ABB Asea Brown Boveri Ltd ABB AB
P.O. Box P.O. Box 8131 SE-72610 Västerås
CH-5401 Baden CH-8050 Zurich Sweden
Switzerland Switzerland Phone +46 (0)21 13 7020
Phone +41 (0)56 205 7700 Phone +41 (0)1 317 7111 Telefax +46 (0)21 32 5448
Telefax +41 (0)56 222 1026 Telefax +41 (0)1 311 9817

ABB Ltd www.abb.com

P.O. Box 8131
CH-8050 Zurich
Switzerland
Phone +41 (0)1 317 7111
Telefax +41 (0)1 311 9817