Alstom and Schneider Electric closed the transaction with Areva for the acquisition of Areva T&D, its transmission and distribution businesses in June, after obtaining the approvals of the relevant competition authorities and the French Commission des Participations et des Transferts (CPT).
A consortium agreement was signed by the two partners in November 2009 for the purpose of this joint acquisition. The price paid for Areva T&D’s shares amounted to $3.36 billion.
The consortium agreement sets out the transfer of the transmission business (about two thirds of the total) to Alstom and of the distribution business (about one third) to Schneider Electric, as well as the ways under which they will be managed. The agreement allows both acquirers to immediately assume separate operational responsibility of each of these businesses.
Alstom and Schneider Electric will also develop co-operation between the transmission and distribution businesses, via commercial and license agreements. R&D agreements will be put in place for the development of innovating technologies to the benefit of both companies.
“Through this acquisition, Alstom builds, in addition to power and transport businesses, a third sector constituting high voltage energy transmission business of the group,” Alstom chairman and chief executive officer, Patrick Kron said.
“This sector will benefit from aggregation of all complementarities and means of the group, mainly of its international network expanded in 70 countries, its technological and industrial expertise and of existing liaisons between high voltage energy distribution and energy generation. Alstom’s expertise in power generation combined with the capabilities acquired in grid management will give the group a unique position in the key market of smart grid.”
Alstom announced the development of a new ‘sector’, named “Alstom Grid”, to supplement its existing two sectors in power generation and rail transport, power and transport. This acquisition gives a new dimension to the Alstom Group, which, now with its three sectors, achieves sales of more than $33.6 billion and employs more than 96,000 people.
“Alstom Grid, Alstom’s high-voltage transmission business, will be its third sector alongside ‘Power’ and ‘Transport’. This sector will benefit from all the synergies and all the resources that the group has, particularly in its international network having a presence in 70 countries, its technological and industrial capabilities and in the existing links between the high-voltage electricity transmission and power generation business,” Mr Kron said.
“Alstom Grid brings its customers more than 100 years of experience in the development of the world electrical grids, advanced technologies and expertise in key domains such as power electronics, ultra high voltage, direct current interconnections, integration of renewables into the grid and network management solutions. Alstom Grid has all the necessary advantages in terms of technologies, manufacturing and people to continue to be a leading contributor to the smarter grids of the future,” Alstom Grid president, Henri Poupart-Lafarge said.
The new sector comprises four main businesses. It designs and manufactures the electrical equipment of the ultra-high-voltage and high-voltage electricity transmission system, a business that accounts for more than 50 per cent of sales. It supplies electricity network management systems and carries out major turnkey projects accounting for approximately a third of sales. The automation business develops sophisticated information systems so that the operators can manage electricity grids in real time. Lastly, the service business runs after-sales operations (repair, refurbishment, spare parts) and provides consulting, assessment and training services.
In parallel, Alstom and Schneider Electric, as they announced at the end of November 2009, will develop the links between their transmission and distribution businesses. In commercial matters, the two groups plan to conclude agreements for big electricity projects or licences. R&D agreements are also planned to develop innovative technologies which are of interest to both companies.