Offer for Areva T&D unit 'competitive', says Alstom

The Chairman and Chief Executive Officer of France’s Alstom Global Patrick Kron says the company has made the “most competitive offer” for French nuclear reactor builder Areva’s transmission and distribution (T&D) business.

Both Alstom and Areva have Indian subsidiaries and the bid will have significant impact on operations of both subsidiaries. Areva is selling its T&D unit to raise capital amid stiff opposition from French worker unions and Alstom (along with partner Schneider) is one of the many players in the fray.

“I have made it clear that if Areva’s T&D business is for sale, we will look at it. It is for sale, we have been bidding, we have made a competitive offer. Hope we are going to win,” Kron said.

The CEO also dispelled doubts that an Alstom takeover would result in job losses at Areva but added that splitting the T&D business would be rational for future growth, a move that is expected to meet with opposition from workers. “A clear spilt between the high-voltage business, which is very close to our power generation business and the medium voltage, which does not have the critical size within Areva T&D [can be done] and it can become a major business,” he said.

“In addition to a change in ownership, a split increases the anxiety, our duty will be, if we win the bid, to kindly explain what we are doing and convince everybody and we are confident that we do it.”

About Alstom’s India plans, Kron said the company was close to finalising a tripartite joint venture with India’s BHEL and NPCIL, and that Alstom was “not hung-up” on being the major partner in the JV. “We are confident of growth in the power business in India. We are looking for partners in the country and acquisitions are not a priority,” he said.

Here is a verbatim transcript of the exclusive interview with Patrick Kron on CNBC-TV18. Also watch the accompanying video.

Q: You just landed in India along with your entire managing board. I believe this is the first time the board is meeting in India. Why the decision to do this in India?

A: We just arrived and gathered here for a managing team meeting and this is the recognition obviously of the importance of the country and our strategy, as well as the opportunities we have in the Indian market.

Q: But you do not do this very often because usually you meet only in your headquarters. Is there is a specific reason, is India looking more attractive in comparison to other emerging markets at this point in time?

A: We obviously gather in our headquarters most often. But we go on very unknown sites and I have personally had the opportunity to visit a number of countries including India. So India is not new for us. We have been here for close to 100 years. It is clear that there are many new opportunities coming. So it’s a recognition of a strong history but also a bright future in our hands, I hope.

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