Areva may enter India via Alstom unit buy

Areva, the French conglomerate with a presence in 30 countries, is in exclusive talks with Alstom, the struggling French power equipment maker, for purchasing the latter's T&D business worldwide, said Jean-Pierre Fesson, director of Alstom Ltd.

Fesson, who is Alstom's representative on the board of its Indian subsidiary Alstom Ltd, said a decision on the proposed deal was expected shortly.

"It was presumed that the deal would be signed by August. Accordingly, Alstom Ltd has fixed the annual general meeting (AGM) today so that the shareholders could be informed about the deal. However, a decision on the proposed sale of T&D business is expected to be taken before the annual general meeting of (AGM) Alstom, France," he said.

Alstom's AGM is slated to take place in the third week of this month.

E G Nolan, another Alstom representatives on the board of Alstom Ltd, said Areva was a worldwide leader in nuclear power and third largest electronic connectors maker. Areva was present in Asia, including in Taiwan, Japan and China.

Nolan said the Alstom would complete all formalities, including legal ones, to execute the sale deal by December.

Ajay Dhagat, joint managing director of Alstom Ltd, said the company would continue its operations even after the parent pulled out of the firm.

"The name of the company may be changed. However, operations will continue," he said.

Alstom Ltd chairman S K Poddar said the company extended Dhagat's tenure as joint managing director for a year, keeping in mind that the T&D business would be sold out shortly.

T&D was the main money spinner for Alstom Ltd, accounting for 83 per cent of the company's total business. The motors division, contributing 17 per cent revenue, has become a drag on the company's profitability.

The Rs 511-crore Alstom Ltd has been in the country from the beginning of the last century. Its name and ownership has changed several times since then.

It was born as General Electric Company and it amalgamated with English Electric. The merged entity later became GEC Alsthom, which, due to change in foreign promoter, became Alstom Ltd.

Alstom's T&D business operated in countries such as France, Germany, the United Kingdom, the United States, India, the United Arab Emirates, Mexico, Brazil, Singapore and China.

The customers of T&D business include utilities (independent power producers, transmission system operators, distribution system operators, retailers and classical utilities), industrials (buildings, railways, process industries and manufacturing) and value-added resellers (electrical engineering contractors and panel builders).