AREVA to Sell Lucrative T&D Division to Alstom and Schneider Electric

French nuclear giant AREVA on Monday announced it would sell its lucrative transmission and distribution (T&D) division to Alstom and Schneider Electric—both French firms—for €4.09 billion, rejecting bids from U.S.-based General Electric and Japan’s Toshiba Corp.

AREVA put up its T&D business earlier this summer to plug a €12 billion gap and finance investments such as the buyout of Siemens and AREVA NP following the dissolution of that nuclear joint venture, as well as cost overruns on the Finnish EPR Olkiluoto 3 project. The T&D sector generated €5.06 billion in 2008, or 38% or AREVA’s total revenue, and the division grew 17% in 2008 as compared to 2007.

The company said on Monday that the three bids were “relatively similar in terms of value, representing more than four times the price paid by AREVA for the business five years ago.” 

The consortium’s offer of €2.29 billion euros in equity value—or €4.09 billion in enterprise value—did not include a seller’s warranty. The deal would require that Alstom and Schneider maintain all European sites for a three-year period, however. The companies also plan to agree that, unless the economic environment deteriorates significantly, Alstom and Schneider will not lay off employees.

Source: AREVA