Alstom takes over Areva's ME transmission business
Areva T&D divestment now complete.
Alstom and Schneider Electric proceeded on Monday with the closing of the transaction with Areva for the acquisition of Areva T&D, its transmission and distribution businesses, after obtaining the approvals of the relevant competition authorities and the French Commission des Participations et des Transferts.
The consortium agreement sets out the transfer of the Transmission business, which is about two thirds of the total, to Alstom. The Distribution business, which accounts for about one third of the total, goes to Schneider Electric. The agreement allows both acquirers to immediately assume separate operational responsibility of each of these businesses.
As Areva’s T&D business in the Middle East was focused mainly on transmission, Alstom will take over the majority of Areva’s regional operations.
"T&D is acting in theMiddle-east mainly through project activity which goes to Alstom. Nevertheless this activity is incorporating a lot of MV products coming from divisions going to Schneider. Some commercial and services people will be transferred to Schneider Electric for export to and service in the Gulf." an Areva spokesperson said.
A consortium agreement was signed by the two partners in November 2009 for the purpose of this joint acquisition. The price paid for Areva T&D’s shares amounted to around US$2.7 bn. The net financial debt of Areva T&D was about US$1.1 bn as of December 31, 2009.
Alstom and Schneider Electric will also develop cooperation between the Transmission and Distribution businesses, via commercial and license agreements. R&D agreements will be put in place for the development of innovating technologies to the benefit of both companies.
By acquiring Areva’s T&D transmission business, Alstom is following its strategy of building up its third business arm, Alstom Grid, next to its Power and Transport division. In 2009, Alstom Grid generated sales of over US$4bn in sales, and employed 20,000 people worldwide.
“Through this acquisition, Alstom builds, in addition to Power and Transport businesses, a third sector constituting high voltage energy transmission business of the group. This sector will benefit from aggregation of all complementarities and means of the group, mainly of its international network expanded in 70 countries, its technological and industrial expertise and of existing liaisons between high voltage energy distribution and energy generation. Alstom’s expertise in power generation combined with the capabilities acquired in grid management will give the Group a unique position in the key market of smart grid” said Patrick Kron, Alstom’s chairman & chief executive officer.
“We will combine our teams’ expertise in medium voltage and that of Areva D to create a new business, Energy, elevating Schneider Electric to the position of global leader in medium voltage. This consolidation reinforces considerably our offers in medium voltage and network automation. It will also strengthen Schneider Electric’s presence in new economies and access to utilities and electro-intensive customers, and enhance the group’s position at the centre of the smart grid technological revolution” said Jean-Pascal Tricoire, Schneider Electric’s president and CEO.