Energy management company Schneider Electric (SBGSY.PK,SBGSF.PK) and Alstom (ALS.L) said Monday that they have entered into exclusive negotiations with Areva (ARVCY.PK) for the acquisition of Areva's transmission and distribution business, Areva T&D. The companies plan a project placing T&D at the core of the strategy of the two groups and noted that it will create two global specialists in the upstream and downstream sectors of the electricity market.
Alstom and Schneider Electric have submitted a bid and propose jointly to acquire Areva T&D for an equity value of EUR 2.29 billion. These negotiations are set to finalize the disposal agreement, which necessitates the approval of the Commission de la Participation et des Transferts, the view of employee representatives and the agreement of the competition authorities.
As per the proposed integration, the Transmission part moves to Alstom, which will come to around two thirds of the business, and the Distribution side to Schneider Electric, which is about one third of the business. Schneider Electric and Alstom will subsequently transform into an upstream pole, with power generation provided by Alstom, completed by transmission transferred from Areva T&D to Alstom and a downstream pole, with power distribution provided by Schneider Electric, supported by the medium voltage activities of Areva T&D. Alstom and Schneider Electric also said that they will considerably extend the capabilities of Areva T&D in turnkey projects, which is currently EUR 1.6 billion just for transmission and distribution, to more than EUR 8 billion for the complete electricity market with the addition of the capabilities of Alstom and Schneider Electric. Following the closing of the transaction, Schneider Electric and Alstom plan to acquire the shares of Areva T&D through a joint legal vehicle, from which the activities will be progressively transferred to Schneider Electric and Alstom.
SBGSY.PK closed Monday's regular trading at $11.15 on the OTC, while SBGSF.PK last traded at $113.25. ARVCY.PK ended on Monday at $5.25.
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