Alstom-Schneider wins bid for France's Areva

Alstom, which makes high-speed trains and energy-generation equipment, and Schneider, a maker of electrical circuits, bid 4.09 billion euros ($6.14 billion) for Areva T&D, the nuclear- reactor company said yesterday. The French state, which owns 91 percent of Areva, expects to complete the transaction in 2010.

The sale keeps the third-largest provider of power transmission and distribution equipment in French hands and returns parts of the business to Alstom, which had sold the unit to Areva for 920 million euros in 2004 to help avoid collapse. GE said it was “disappointed in the outcome,” after Chief Executive Officer Jeffrey Immelt had traveled to Paris to help clinch the deal in negotiations with the French government.

“Alstom's win allows the French Industrial Jewel to regain some of the luster it lost and participate in the rapid build- out of new transmission infrastructure in emerging countries,” Ben Elias, analyst at Sterne Agee & Leach, said in an e-mail. Elias has a “neutral” rating on Areva stock.

Shares Rise

Alstom rose as much as 3.12 euros, or 6.7 percent, to 49.75 euros in Paris, and traded at 49.23 euros as of 11:16 a.m. Schneider advanced as much as 4.8 percent to 76.4 euros. The two stocks were the best performers on France's CAC40 Index.

The two companies said they will divide the unit, with Alstom taking the transmission business, which accounts for two- thirds of T&D, and Schneider owning the distribution business. The decision to pick the French team followed an examination of the bids yesterday, Areva said.

Paris-based Areva trails ABB Ltd. and Siemens AG in the global power-grid market. President Nicolas Sarkozy orchestrated the sale to Areva in 2004 as finance minister to avert Alstom's breakdown, and Areva is now selling it on to fund expansion in the global nuclear power market.

“The Alstom-Schneider offer appeared as the most favorable regarding the criteria set by Areva and the state, which was to respect the patrimonial interests of Areva and the development of industry and employment,” Finance Minister Christine Lagarde said in a statement late yesterday.

The transmission and distribution market's growth is tied to overall power demand, which Areva estimates will double by 2030. Areva operates in more than 100 countries.

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