Alstom and Schneider in Areva deal

SHARES in Alstom and Schneider Electric rose yesterday after the duo pushed aside non-French rivals to enter exclusive talks to buy Areva&rsquo;s nuclear transmission and distribution business.<br /><br />Several analysts said the French consortium&rsquo;s &euro;4.09bn (&pound;3.7bn) offer appeared to be fair and the bid removed uncertainty that Areva might sell to Japan&rsquo;s Toshiba and American General Electric.<br /><br />Areva, 93 per cent owned by the French state, said on Monday night it had begun exclusive negotiations with French engineering group Alstom and Schneider.<br /><br />However, analysts were cautious about the future profitabilty of the business, noting that Areva&rsquo;s first-half 2009 earnings had disappointed.<br /><br />&ldquo;This (deal) seems attractive but investors should bear in mind the poor free cash flow profile of the business,&rdquo; WestLB said.<br /><br />Shares of Alstom and Schneider were the two main gainers in France&rsquo;s CAC-40 index. Alstom rose 6.7 per cent to close at &euro;49.77, while Schneider added 3.8 per cent to close at &euro;75.67.<br /><br />The French government had made no secret of wanting to keep the assets in national hands.