Embattled French engineering giant, Alstom, yesterday announced the £658m sale of its transmission and distribution division to French state-owned company, Areva.
The profitable T&D arm employs 25,000 people in 70 countries with about 3,500 of those at UK sites at Stafford, Rugby and Kidsgrove, Stoke-on-Trent.
Neither company would be drawn on the future prospects for the UK sites although Alstom chairman and chief executive officer, Patrick Kron, predicted a "bright future" for T&D within Areva.
T&D, which produces power generator and distribution equipment, generated sales of £2.2b in the last financial year, accounting for 15 per cent of Alstom's revenues. Mr Kron said that the deal was "another key step in its continuing disposal programme".
Earlier this week the European Commission approved a £2.2bn rescue package, which involved the French government lending Alstom £550m and the balance coming in the form of new bonds and loans from a consortium of creditors.
A previous plan to partially nationalise Alstom, which builds trains, ships and power turbines, was rejected by the Commission, which does not allow state aid to industry.
Ben Uglow, an analyst at Morgan Stanley, saw the price for T&D as "pretty much what we were expecting" but with total debts of £3.4b he added that it was "inevitable that the disposal programme will have to be accelerated".
Any future sell-offs appear likely to come in the company's energy division with Mr Kron ruling out the sale of its TGV train business, earlier this week.Reuse content