Japanese electronics company Toshiba Corp. could reportedly bid for French state-owned AREVA’s lucrative transmission and distribution (T&D) business. Toshiba, which acquired U.S. nuclear reactor maker Westinghouse Electric Co. in 2006, will likely enter a $5 billion bid, vying against a Chinese sovereign fund and other companies.
AREVA put up its T&D business to plug a €12 billion gap and finance its investments earlier this summer. The 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.
French engineering groups Alstom and Schneider Electric have so far expressed interest in the venture, Alstom for the transmission part, and Schneider for the distribution part. Chinese sovereign fund China Investment Corp. was also in talks with AREVA to acquire the business, Reuters reported on Friday.
The deal could help Toshiba become a full-service nuclear provider, Reuters reported, allowing the company to offer services from uranium procurement to transmission and distribution. However, the company would need to carry out aggressive restructuring before acquiring the company. The news agency speculated that the Japanese firm is still in heavy debt from its $5 billion acquisition of Westinghouse in 2006.
Source: Reuters
