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| Edited By: Promit Mukherjee |Source: DNA |Updated: Mar 16, 2018, 04:48 AM IST
Germany-based engineering behemoth Siemens AG has offered to buy out French company Areva AG’s transmission and distribution (T&D) division.
According to media reports, Joe Kaesar, chief financial officer of Siemens, told reporters in Frankfurt that the company would like to buy out Areva T&D in case the French company approached it. “We would look at it: they know where to find us.”
Areva AG has a fully owned subsidiary in India - Areva T&D India. It is expected that in case the deal goes through, the Indian subsidiary will also become a part of Siemens.
Shilpa Krishnan and Sumit Kishore, analysts with international brokerage firm J P Morgan, wrote in a May 28 report, “While Siemens is a long-established player in India vis-a-vis Areva, we believe an addition of Areva’s portfolio would make it a dominant player far ahead of ABB and Crompton Greaves.”
It would also provide newer manufacturing plants to Siemens and improve profitability for the company, the analysts said.
According to them, Areva T&D India has a transformer capacity in excess of 20,000 MVA, making it one of the largest players by installed capacity in India. It clocked earnings before interest, tax, depreciation and amortisation margins of 15.4%, making it the most profitable T&D player in the country.
Rathin Basu, country head, Areva T&D India had said during an interaction with DNA Money recently, “We are currently investing in eight factories across three sites in India with an aim to double our volumes in the country.” The capacity expansion undertaken by the company will help it double sales by the end of 2012, he said.
This would lead to potential cost savings and synergies due to common customers and manufacturing facilities, the JP Morgan analysts wrote in their report.
The value of the deal for the whole of Areva’s T&D operations is expected to be euro 4 billion, the analysts wrote, quoting another analyst.
Schneider Electric SA and Alstom SA are the other companies in the fray for Areva’s T&D operations.
