Appeal No. 172 of 2010. Case: Alstom Sextant 5 and Ors. Vs The Securities and Exchange Board of India. Securities and Exchange Board of India

Case NumberAppeal No. 172 of 2010
JudgesN.K. Sodhi, J.(Presiding Officer), Samar Ray and P.K. Malhotra, Members
IssueCompany Law
Judgement DateOctober 29, 2010
CourtSecurities and Exchange Board of India


N.K. Sodhi, J.(Presiding Officer)

1. In this appeal we are concerned with the indirect acquisition of AREVA T&D India Limited, a listed company in India which is the target company. It is being indirectly acquired on the global acquisition in France of the parent company namely, T&D Holding SA (formerly known as AREVA T&D Holding SA) which has its registered office in France and is appellant No. 6 before us. AREVA T&D SAS, France and Long & Crawford Ltd., Great Britain, appellants No. 7 and 8 are the wholly owned subsidiaries of the parent company. The parent company and its two subsidiaries are the promoters of the target company and they together hold 72.18 per cent of its subscribed and paid-up share capital.

2. AREVA SA, a company with its registered office in Paris (France) (for short the seller) is selling its stake in the parent company and it conducted a competitive open bidding process for the transfer of its global transmission and distribution electrical business. The bidders were required to respond with their indicative offers by September 18, 2009. ALSTOM Holdings, appellant No. 2 and Schneider Electric Industries SAS, appellant No. 3 together submitted an indicative offer for acquiring the business of the seller. These two appellants formed a Consortium and set up ALSTOM Sextant 5, the first appellant before us as a Special Purpose Vehicle for acquiring the stake of the seller. Apart from the Consortium, there were several other bidders. The seller short listed three bidders namely, the Consortium, General Electric and Toshiba/Innovation Network Corporation of Japan and they were required to respond to the seller with a final offer which they did. After holding discussions with the three short listed bidders, the Supervisory Board of the seller decided on November 30, 2009 to enter into exclusive negotiations with the Consortium for the proposed transaction and to finalize the share purchase agreement. After deciding to have exclusive negotiations with the Consortium, both the seller and the Consortium came out with their separate press releases on November 30, 2009 itself making it known that they were entering into exclusive negotiations for the transaction. The relevant portion of the press release issued by the Consortium reads as under:

The Areva Supervisory Board on 30 November 2009 has announced its decision to enter into exclusive negotiations with Alstom and Schneider Electric for the acquisition of the activities of its transmission and distribution business, Areva T&D.

Schneider Electric and Alstom are satisfied with the decision of Areva to retain their offer for exclusive negotiations. The aim of these negotiations is to finalise the disposal agreement which should ultimately need the approval of the "Commission de la Participation et des Transferts", the view of employee representatives and the agreement of the competition authorities.

The press release issued by the seller also disseminated the same information and the relevant part is as under:

AREVA's Supervisory Board met on November 30, 2009 to examine the bids. After review, the Supervisory Board asked the Executive Board to begin exclusive negotiations with Alstom/Schneider.

The consortium offered 2.29 billion euros in equity value, i.e. 4.09 billion euros in enterprise value. The bid does not include any requirement for a seller's warranty but includes a buyer's commitment to maintain all European sites for a 3-year period.

It is not in dispute that the Consortium extended on November 30, 2009 its revised final offer and agreed to keep it open till June 30, 2010. After holding negotiations and obtaining opinion from the Works' Council and having completed the other formalities, the seller and the Consortium executed a Share Purchase Agreement (SPA) on January 20, 2010 by which the first appellant agreed to acquire 100 per cent of the issued share capital and voting rights of the seller in the parent company for an aggregate purchase price of two billion and two hundred and ninety million Euros. The global acquisition of the parent company was announced on this day. On the signing of the SPA, the first appellant acquired not only the parent company but also indirectly the...

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