EDF to take stake in Areva's reactor business

04 June 2015

The French government has backed a plan for EDF to take a majority stake in Areva's reactor business as part of a revitalization of the country's nuclear power industry. Areva NP would then operate as a separate company.

French president Francois Hollande met yesterday with prime minister Manuel Valls and the ministers of energy, economy, finance and foreign affairs to discuss the country's nuclear industry.

During the meeting, approval was given for both companies' activities related to the design, project management and marketing of new nuclear power reactors to be consolidated into a separate company. In a statement, the president's office said, subject to a comprehensive strategic partnership with Areva, "EDF aims to become the majority shareholder in the Areva NP joint venture." Areva, it said, would retain a "strategic participation" through a shareholders' agreement. It added that the change would enable an "ambitious export policy and the future renewal of the French nuclear fleet".

The project would also enable EDF and Areva to discuss a reduction in risk from major ongoing projects led by Areva NP "in the interest of all stakeholders of the French sector", the government said. "It preserves the integrity of Areva NP and its businesses. It guarantees the viability of the Areva group around refounded, balanced commercial contracts with its customers. It provides continuity between fuel cycle activities and those of construction and maintenance of reactors in compliance with the highest standards of safety," it said. Areva and EDF have indicated they will finalize "the principles of the draft" within one month, it added.

Areva said that it and its governing authorities "will work in complete cooperation with EDF on the roadmap as it is defined, notably on the terms of an agreement for a global strategic partnership and the conditions for EDF to take a majority stake in the capital of Areva NP". It added, "For entirety of the company's businesses, the urgency for the competitiveness measures remains."

In March, Areva announced a two-part strategy to refocus on its core business of nuclear power and return to competitiveness, aiming to make savings of about €1 billion ($1.1 billion) over the next few years after a record loss in 2014 of €4.83 billion ($5.38 billion).

Areva - which is 87% owned by the French state - attributed the size of the loss to costs associated with delays to its nuclear and renewable energy projects. Revenue dipped 7.2% year on year to €8.34 billion ($9.29 billion), of which nuclear operations accounted for €8.21 billion ($9.14 billion) - down 7.3% - and renewables operations €53 million ($59 million) - down 21.4%.

Researched and written
by World Nuclear News