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ABB books pre-tax provisions of $850 million

The Swiss-Swedish engineering group ABB has announced it will book provisions of around $850 million (SFr920 million) for the fourth quarter.

The company added on Friday that it would launch a cost-cutting programme to save more than $1 billion.

The provisions are for potential costs related to the previously disclosed investigations by United States and European authorities into suspect payments and alleged anti-competitive practices, respectively.

The provisions also include an amount for the anticipated impact of a pending tax dispute, asset writedowns and restructuring charges related to the weaker business environment.

More details about the company’s cost-cutting programme will be announced when full-year earnings are reported on February 12.

“Given the uncertainty surrounding the global economy, we must be sensible and prudent from an early stage and ensure that ABB’s cost base is in line with weaker market conditions,” said CEO Joe Hogan on Friday.

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