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.