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Alstom sells T&D but keeps drives and PLCs

01 October, 2003

As expected, the troubled Alstom group has sold its transmission and distribution activities to the French nuclear business, Areva. But Alstom is keeping the power conversion part of the T&D business, which includes products such as motors, PLCs and variable speed drives.

Areva is paying €950m for the T&D business which, in the last financial year, generated sales of €3.2bn (excluding the power conversion business), accounting for 15% of the group`s total sales. The T&D business employs 25,000 people in 70 countries.

The deal is expected to be completed by January 2004, subject to regulatory approval and employee consultations.

In a separate move, the European Commission is widening its probe into the multibillion-Euro aid package that the French Government is offering to rescue Alstom, whose debt amounts to €5bn.The EC rejected an initial rescue package, objecting, in particular, to a provision that would have allowed the French governement to take an equity stake in Alstom. The government subsequently redrafted its package dropping this provision.

The Commission`s probe to determine whether the French plan would harm competition in Europe, is expected to take at least six months to complete.

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