Under the agreement, US-German company DaimlerChrysler will pay a cash compensation of $472 million for ABB's 50 per cent share in Adtranz, a joint statement of the two companies said.

DaimlerChrysler and ABB said they had also decided that existing supply agreements will continue as before.

"This is a clear signal that we intend to move Adtranz forward forcefully. By integrating Adtranz fully into our strategic framework, we expect gains both for Adtranz and for DaimlerChrysler," Eckhard Cordes board member of DaimlerChrysler said.

ABB chief executive and president Goran Lindahi said, "We share the view of DaimlerChrysler and Adtranz that employees, customers and investors are best served by making it part of a group with a focus ontransportation products".

Adtranz is a global rail transportation company established in 1996 with total revenue of $3.7 billion in 1997.

ABB group is into power generation, transmission and distribution and has reported orders of $35 billion in 1997.