Areva T&D Executives Argue Against Dismantling Co-Document
04.11.09, 16:11 Uhr |
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PARIS -(Dow Jones)- Forty-one vice-presidents of the power transmission and distribution division of French nuclear engineering giant Areva SA (CEI.FR) have sent a letter to the firm's chief executive and its supervisory board chairman urging that the division not be broken up as part of any agreement to sell it, according to a document seen by Dow Jones Newswires.
State-controlled Areva plans to sell Areva T&D unit to raise funds for a massive investment program to position it as the world's leading provider of nuclear power plant technology.
The French government had been hoping to raise as much as EUR5 billion from the sale. But the three groups currently in the race to acquire Areva T&D have bid far lower than the government target and have until Monday to make final binding bids, people familiar with the matter say.
Areva wasn't available to comment on the letter.
With EUR5.07 billion of annual sales, the T&D unit accounted for 38% of Areva's total revenue in 2008. Areva develops and builds nuclear reactors, provides nuclear sector services and mines uranium, among other activities.
So far, the company has only said it has taken three unidentified bidders through to a second round and has declined to comment on key details and timing.
In the letter to Areva's supervisory board chairman Jean-Cyril Spinetta and Chief Executive Anne Lauvergeon, the 41 executives said they had been polled last week and expressed concerns that a dismantling of the T&D unit would have either a very, or extremely negative impact on the future of the division.
Among the bidders are understood to be a grouping of French power-plant and rail technology group Alstom SA (ALO.FR) and electrical engineering group Schneider Electric SA (SU.FR). General Electric Co. (GE) of the U.S. has teamed with CVC Capital Partners, while Japan's Toshiba Corp. (6502.TO) rounds out the bidders, people familiar with the situation say.
The all-French offer is thought to be the lowest, although it might be favored by French President Nicolas Sarkozy, who has a stated aim of creating French industrial champions in strategic industries.
The letter doesn't identify which bids would call for the breakup of Areva T&D. But the Alstom/Schneider plan is the only one known to call for splitting up the T&D unit between the two.
On Tuesday, workers representatives at T&D had publicly termed the Alstom/Schneider bid as having the most hurtful potential impact on jobs.
In their letter sent to Spinetta and Lauvergeon, the 41 executives said that Areva T&D is resisting the economic downturn better than its competitors. "Why dismantle that which succeeds," the letter says.
In the letter, the executives also warned that a dismantling of the unit would drop high-tension activities into the second tier of actors in its industry and deprive it of the critical mass required to support heavy research and development requirements. In addition, they said, the firm's medium-tension activities already compete with one of the bidders. Any review of the deal by European Union regulators would lead to a loss of market share, as well as asset disposals or industrial restructuring at these operations, they said.
The French government had been hoping to raise as much as EUR5 billion from the sale. But the three groups currently in the race to acquire Areva T&D have bid far lower than the government target and have until Monday to make final binding bids, people familiar with the matter say.
Areva wasn't available to comment on the letter.
With EUR5.07 billion of annual sales, the T&D unit accounted for 38% of Areva's total revenue in 2008. Areva develops and builds nuclear reactors, provides nuclear sector services and mines uranium, among other activities.
So far, the company has only said it has taken three unidentified bidders through to a second round and has declined to comment on key details and timing.
In the letter to Areva's supervisory board chairman Jean-Cyril Spinetta and Chief Executive Anne Lauvergeon, the 41 executives said they had been polled last week and expressed concerns that a dismantling of the T&D unit would have either a very, or extremely negative impact on the future of the division.
Among the bidders are understood to be a grouping of French power-plant and rail technology group Alstom SA (ALO.FR) and electrical engineering group Schneider Electric SA (SU.FR). General Electric Co. (GE) of the U.S. has teamed with CVC Capital Partners, while Japan's Toshiba Corp. (6502.TO) rounds out the bidders, people familiar with the situation say.
The all-French offer is thought to be the lowest, although it might be favored by French President Nicolas Sarkozy, who has a stated aim of creating French industrial champions in strategic industries.
The letter doesn't identify which bids would call for the breakup of Areva T&D. But the Alstom/Schneider plan is the only one known to call for splitting up the T&D unit between the two.
On Tuesday, workers representatives at T&D had publicly termed the Alstom/Schneider bid as having the most hurtful potential impact on jobs.
In their letter sent to Spinetta and Lauvergeon, the 41 executives said that Areva T&D is resisting the economic downturn better than its competitors. "Why dismantle that which succeeds," the letter says.
In the letter, the executives also warned that a dismantling of the unit would drop high-tension activities into the second tier of actors in its industry and deprive it of the critical mass required to support heavy research and development requirements. In addition, they said, the firm's medium-tension activities already compete with one of the bidders. Any review of the deal by European Union regulators would lead to a loss of market share, as well as asset disposals or industrial restructuring at these operations, they said.
Company Web site: www.areva.com
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