White House Statement on the Proposed Foreign Acquisition of the ABB-Westinghouse Joint Venture

The President today decided against intervening in the possible acquisition by ASEA Brown Boveri Ltd. (ABB), a Swiss/Swedish firm, of Westinghouse Electric Corporation's interest in an ABB-Westinghouse joint venture for the manufacture, distribution, sale, and servicing of electrical transmission and distribution equipment in the United States.

The President based his decision on the results of the investigation by the Committee on Foreign Investment in the United States (CFIUS), chaired by Treasury Secretary Nicholas F. Brady. CFIUS conducted a thorough investigation of various issues relating to the manufacturing and maintenance of extra-high voltage (EVH) transformers. During the investigation, ABB reconfirmed its intention to continue the manufacture, servicing, repair, research, and design in the United States of these high voltage transformers.

The ABB-Westinghouse investigation was conducted pursuant to section 5021 of the Omnibus Trade and Competitiveness Act of 1988. That provision, known as the Exon-Florio provision, authorizes the President to investigate and, if necessary, to suspend or prohibit a proposed foreign acquisition of a U.S. business engaged in U.S. interstate commerce. The criteria to suspend or prohibit a transaction are that the President must find:

-- credible evidence to believe that the foreign investor might take actions that threaten to impair the national security;

-- that existing laws, other than the International Emergency Economic Powers Act and the Exon-Florio provision itself, are inadequate and inappropriate to deal with the national security threat.