ABB and Arkad to form joint venture in oil & gas EPC business, with Arkad taking a majority interest

Milan, Italy, November 6, 2017 - ABB S.p.A., Italy, and Arkad Engineering & Construction Ltd. have signed an agreement to form a joint venture (JV) to execute Engineering, Procurement and Construction (EPC) projects in the oil & gas industry. ABB’s current oil & gas EPC business will be transferred to the new JV company in which leading Saudi EPC company Arkad, will hold the majority share. This JV will allow to better serve current and future oil & gas EPC customers by combining the complementary strengths of Arkad and ABB’s oil & gas EPC unit. The transaction is in line with ABB's Next level strategy aimed at enhanced competitiveness and business models with more attractive risk profiles. Closing of the transaction is expected in the coming months, subject to customary approvals.

“The JV is in line with our strategy to continuously optimize our portfolio while increasing customer focus. Arkad’s core strengths and deep local roots perfectly complement the competencies of the oil & gas EPC unit, allowing it to reach its full potential for the benefit of customers,” said Peter Terwiesch, President of ABB’s Industrial Automation division. “While our oil & gas EPC business will be transferred to the new JV, ABB will continue to serve the oil, gas and chemicals sector globally with its industry-leading automation, electrification and digitalization solutions,” Terwiesch continued.

The new JV company, Arkad-ABB S.p.A., will provide the full range of integrated EPC services for oil & gas plants including project management, process engineering, multi-disciplinary detailed engineering, procurement, construction, commissioning and start-up. It will build on more than 50 years of experience in oil & gas EPC and the successful delivery of more than 300 projects globally.

Arkad is a fully integrated EPC contractor offering innovative solutions for the energy sector in the Kingdom of Saudi Arabia (KSA). Headquartered in Al Khobar, KSA, Arkad has grown significantly over the last decade, with around 9,000 full-time employees and a substantial asset portfolio, supporting world-class competencies in EPC in KSA and within the region. Built on technical expertise and an entrepreneurial spirit, Arkad is also committed to developing and investing in local skills and talent as part of its drive to build world-class energy capabilities.

With a track-record of successful EPC project delivery in the Gulf, Arkad is today the partner of choice for many global businesses in the energy sector, including Saudi Aramco, where it is leading the EPC of one of the world’s largest pipeline projects. The Master Gas Program Phase II, when completed in 2018, will increase capacity to 12.5 billion standard cubic feet per day. These vital pipelines will significantly expand Saudi Aramco's capabilities for delivering sales gas to power plants and petrochemical facilities throughout the Kingdom of Saudi Arabia.

Hani Abdulhadi, Managing Director of Arkad commented, "This transaction is a major milestone for Arkad as we seek to expand our global footprint. It gives us access into exciting new markets, including Algeria, Kuwait, Italy and Abu Dhabi. It will further strengthen and grow Arkad-ABB S.p.A.’s energy EPC business and allow for further growth in Saudi Arabia and internationally. ABB is the ideal partner for Arkad and we look forward to working together in taking the business
forward.”

After closing, Arkad-ABB S.p.A. will continue to be headquartered in Milan, Italy and ABB’s oil & gas EPC employees and management will transition into the new legal entity. The JV company will avail of all existing competencies as well as the established reference list, ensuring continuity in the expertise, teams and processes for ongoing and future projects. Final details of the transaction will be determined by the partners prior to closing.

ABB (ABBN: SIX Swiss Ex) is a pioneering technology leader in electrification products, robotics and motion, industrial automation and power grids, serving customers in utilities, industry and transport & infrastructure globally. Continuing more than a 125-year history of innovation, ABB today is writing the future of industrial digitalization and driving the Energy and Fourth Industrial Revolutions. ABB operates in more than 100 countries with about 136,000 employees. www.abb.com

Arkad is a fully integrated EPC contractor offering innovative solutions for the energy sector across the Kingdom of Saudi Arabia (KSA). Headquartered in Al Khobar, KSA, Arkad has grown significantly over the last decade, with around 9,000 full-time staff and a substantial asset portfolio supporting world-class competencies in EPC in KSA and within the region. Built on technical expertise and an entrepreneurial spirit, Arkad is also committed to developing and investing in local skills and talent as part of its drive to build world-class energy capabilities. www.arkad.com



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