No Surprise Here: French Consortium Wins Bid for Areva T&D

As predicted here earlier this month, Areva SA has announced that the French consortium of Alstom SA and Schneider Electric SA has been selected to buy Areva T&D, the company’s transmission and distribution division, leaving international bidders General Electric and Toshiba in the cold.

The sale, expected to take place sometime next year, will cost Alstom-Schneider €2.29 billion, or a total of €4.09 billion including assumed debt; that’s a little over US$6 billion. And according to sources knowledgeable about the sale, Toshiba offered a little more: €4.2 billion. GE's bid was €4 billion.

While Toshiba issued no response to the decision, GE officials expressed their disappointment.

French government officials have repeatedly said there was no favoritism involved, but many observers  believe otherwise, including SGN's Jesse Berst who said in a blog post earlier this month, "I won't go so far as to say the French invented chauvinism, but they have certainly worked hard to perfect it. So even though the French government is interested in getting a good price, it is also concerned about the "cultural" aspect of the new ownership. In other words, if a French consortium is anywhere in the ballpark, it is likely to get the nod over Japan (Toshiba) or the U.S. (GE)."

Alstom and Schneider expect to split the high-voltage and medium-voltage Areva T&D assets, an announcement that has thoroughly riled Areva T&D's unions, management and some Areva executive committee members. The consortium has pledged that it will not eliminate jobs.

While the sale is expected to go through, there are still regulatory hurdles for the deal to clear.

   Why GE’s Bid for Areva T&D May Be Toast (French Toast)

   Wall Street Journal online news article

   Smart Grid company profile: Areva