Alstom, Areva shares soar as French government rethinks nuclear sector

11th September 2007, Comments 0 comments

PARIS, Sept 11, 2007 (AFP) - Areva shares jumped more than 3.0 percent Tuesday after a report said the government had hired advisors to study a reconstruction of the nuclear energy giant, possibly including a tie-up with Alstom and Bouygues.

PARIS, Sept 11, 2007 (AFP) - Areva shares jumped more than 3.0 percent Tuesday after a report said the government had hired advisors to study a reconstruction of the nuclear energy giant, possibly including a tie-up with Alstom and Bouygues.

Shares in Alstom, an engineering firm, and Bouygues, a construction firm, were also sharply higher after French business daily Les Echos said President Nicolas Sarkozy has invited investment bank HSBC and consultants McKinsey to look at options for Areva.

A presidential spokesman later confirmed that the government was engaged in a "strategic reflection" about the energy sector. He did not provide details but the finance ministry said "all options" were being studied.

One of the options could be to merge Areva and Alstom to create a combined group with a market capitalisation of around 40 billion euros (55 billion dolars), the Les Echos report said.

Such a group would be owned about 30 percent by the French state-owned nuclear research body CEA, five percent by the French state, and more than 26 percent by Bouygues, which is already the largest shareholder in Alstom, the report said.

The paper said any proposal must also involve Germany's Siemens, which wants to retain its 34 percent stake in nuclear reactor unit Areva-NP. Siemens could take part in building power stations or could join an alliance in the rail industry, it said.

Analysts at Kepler Equities said in a note to clients that "the transformation process of Areva is starting and could lead to a larger and more powerful group."

Earlier this month the French government tied up the long-delayed merger of Suez and state-owned Gaz de France, giving the country another world energy champion in a sector that Paris was eager to protect from foreigners.

In early afternoon trade, shares in Areva were up 3.20 percent at 705.85 euros on the Paris CAC 40 exchange, Alstom was up 5.46 percent at 134.77 euros and Bouygues stocks climbed 1.79 percent to 56.16 euros.

AFP

Subject: French news

0 Comments To This Article