French engineering firm Areva has chosen a bid from an Alstom-Schneider Electric consortium in the sale of its transmission and distribution business, rejecting offers from both GE of the US and Toshiba of Japan.
The company’s supervisory board says that it will start exclusive negotiations with Alstom-Schneider, which offered EUR2.29 billion in equity value – equivalent to an enterprise value of EUR4.09 billion.
Although the decision of Areva’s supervisory board to favour a bid from a French group should come as no surprise, some in the market believed that the bids from GE and Toshiba were stronger in terms of monetary value.
Both GE and Toshiba had also included strong social provisions in their bids.
The Alstom-Schneider bid includes a commitment to maintain all European sites for the three-year period and not to implement a layoff programme unless the economic environment deteriorates significantly.
Alstom-Schneider have also agreed to offer all Areva T&D employees equivalent employment in the newly bought company _ they will be able to stay in similar positions in the same geographic area, at an equivalent qualification level and without loss of compensation or seniority.
Areva says that all three bids were relatively similar in value, representing more than four times the price paid by Areva for the business five years ago.
Areva’s management and unions had publicly opposed the Alstom-Schneider bid as the consortium will divide the T&D business in two. Schneider will take the medium voltage distribution arm and Alstom the high voltage business.