Areva Receives Binding Offers for Electricity Transmission and Distribution Business

Strategic Insights -

French nuclear reactor builder Areva SA said it has received three binding offers for its electricity transmission and distribution business. The bidders include US-based General Electric Co, Japan's Toshiba Corp, and a consortium led by French companies Alstom SA and Schneider Electric SA. The sale is expected to raise around 11 billion euros for Areva's expansion plans. A final decision on the winner is expected to be made by November 23.

Key Takeaways:

  • Three binding offers have been received by Areva for its T&D business, with all three bidders putting in final offers.
  • General Electric Co made a solo bid, after weeks of intense negotiations with various financial partners failed to come to fruition.
  • Toshiba Corp made an offer in consortium with the investment fund Innovation Network Corp of Japan, leaving behind a previous partner.
  • French partners Alstom SA and Schneider Electric SA also made a joint offer, as expected.
  • The T&D business is estimated to be worth between 3 and 5 billion euros ($4.5-7.5 billion).
  • A final decision on the winner is expected to be made by November 23.
  • The sale is expected to raise around 11 billion euros to fund Areva's expansion plans.
  • The French government, which owns 91 percent of Areva, is likely to weigh in on the T&D sale and may favor a French bidder.
  • Alstom and Schneider Electric's bid may have the best chance of success due to the French government's favoritism towards domestic bidders.

Statistics:

  • The T&D business is estimated to be worth between 3 and 5 billion euros ($4.5-7.5 billion).
  • The sale is expected to raise around 11 billion euros to fund Areva's expansion plans.
  • The French government owns 91 percent of Areva SA.
  • General Electric has $862 million to invest provided by the Japanese government and $8.5 billion in loan guarantees.

Sources:

  • Reuters: "Areva receives binding offers for T&D business, GE goes solo"
  • Alstom SA
  • Schneider Electric SA
  • Toshiba Corp
  • Areva SA
  • General Electric Co
  • Innovation Network Corp of Japan
  • Abu Dhabi National Energy Co (Taqa)