Contract signed for Areva reactor business sale

16 November 2016

Areva and EDF yesterday signed a contract for the sale of Areva NP's reactor business. EDF will take exclusive control of the new entity, referred to as 'New NP' and valued at €2.5 billion ($2.7 billion).

EDF agreed in July 2015 to take a stake of at least 51% in Areva's reactor unit in a government-backed plan to revitalise France's nuclear power industry. Yesterday's contract follows a memorandum of understanding signed by the two companies in July.

New NP will combine the Areva Group's activities relating to the design and manufacture of nuclear reactor equipment and nuclear fuel, and services to the nuclear installed base. Contracts for the Olkiluoto 3 EPR project in Finland and for resources required to complete that project, and some contracts relating to components forged in the Le Creusot plant, are not included in the sale. Those contracts will remain within Areva NP.

Contractual obligations related to the discovery of anomalies in quality inspections of equipment manufactured at the Le Creusot plant, and possibly also at the Saint-Marcel and Jeumont plants, will remain guaranteed by Areva SA, the companies said.

The sale price for 100% of the equity in New NP has been confirmed as €2.5 billion.

The transaction is expected to be concluded in the second half of 2017, subject to favourable conclusions from French regulator ASN concerning the outcome of tests on the primary circuit of the Flamanville 3 EPR under construction; completion and satisfactory conclusions of quality audits at the Le Creusot, Saint-Marcel and Jeumont plants; and approval from the relevant merger control authorities.

Under the terms of the contract, EDF will acquire a stake of up to 75% in New NP. Strategic investors will be able to take minority stakes, with EDF retaining a stake of at least 51%. Areva New Co - the holding company that is to take Areva SA's fuel cycle assets under the restructuring - would then take a stake of 15%. Discussions with strategic investors interested in buying a share in New NP will begin in the coming weeks, the companies said.

Areva began the process of splitting off its nuclear fuel cycle activities into New Co in August, combining the Areva Mines, Areva NC, Areva Projects and Areva Business Support companies and their respective subsidiaries.

EDF Group chairman and CEO Jean-Bernard Lévy said the transaction would enable the French nuclear industry to be more efficient in carrying out major projects such as the 'Grand Carénage' program to extend the operating period of the French nuclear fleet and the construction of new nuclear plants. "We will thus be stronger and more competitive to conquer new international markets," he said.

Areva Group CEO Philippe Knoche said the agreements gave Areva NP's activities a "long-term vision" of a strategic share structure that would be conducive to their development. "This signature marks an important stage in the refocusing of Areva on fuel cycle activities, our core business," he said.

Researched and written
by World Nuclear News