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French nuke giant sells unit to 2 national champions

PARIS - French nuclear giant Areva has decided to sell its power transmission and distribution network to French firms Alstom and Schneider Electric, rejecting Japanese and US bids.

The sale estimated at 4.09 billion euros (6.13 billion dollars) was announced after a meeting of Areva’s supervisory board late on Monday.

Alstom and Schneider Electric were favourites to take over the Transmission and Distribution unit despite union concerns that the sale would lead to job losses.

President Nicolas Sarkozy has made developing France’s cutting-edge nuclear industry a priority and has been keen to keep it in French hands. Areva is 92 percent owned by the French state.

Japanese high tech giant Toshiba and US conglomerate General Electric were also bidding for the unit that generates and distributes electricity.

Economy and Finance Minister Christine Lagarde welcomed the decision and said selling the Areva division to the two French champions was simply ‘the best option’.

‘The decision was taken in favour of Alstom and Schneider certainly because the overall offer was the preferred one,’ she said.

State-controlled Areva, a world leader in nuclear power, announced in June that it was opening its capital to new investors and would sell assets to raise money for massive investments in new nuclear technology.

Areva has said it needs nine billion euros in investment over the next three years to keep its competitive edge in the energy market.

Areva said the three offers it had received were ‘similar and all higher than the acquisition price paid five years ago’ when it bought the unit from Alstom for 900 million euros.

Under the deal to be finalised over the coming months, Alstom will take over transmission, or about two-thirds of the division, with distribution to be moved over to Schneider Electric.

The French companies pledged in a statement to keep jobs.

‘The two partners do not foresee any restructuring linked to the acquisition and are committed to ensuring a professional future for each and every employee,’ they said.

‘Furthermore, in Europe and up until the beginning of 2013, there will be no site closures’ except for those that predate the sale, they added.

France operates 58 nuclear reactors, the world’s second largest network after the United States, and is vying for a big stake in the revival of the nuclear industry worldwide.

Areva has won contracts to build reactors in China and Finland while putting in bids for plants in Britain, India and other countries.