MHI prepares bid for stake in Areva's reactor business

06 November 2015

Mitsubishi Heavy Industries (MHI) said today it will prepare a proposal for taking a minority stake in Areva's reactor business. EDF has already agreed to take a stake of at least 51% in Areva NP, which is also responsible for equipment and fuel manufacturing, as well as services for reactors.

In late-July, EDF and Areva announced they had signed a memorandum of understanding that sets out the principal terms and conditions for EDF to take a majority in Areva NP. Areva will hold a stake of no more than 25%, allowing the potential participation of other minority partners.

"I have high expectations that an investment by MHI into Areva NP would realize and strengthen the ties between the Japanese and French nuclear energy industries further."

Shunichi Miyanaga,
MHI president & CEO

At that time, EDF said a due diligence phase would begin in August so that it can submit a binding offer during the fourth quarter of 2015. The company said it would continue discussions with other potential partners before submitting a binding offer. Subject to regulatory approvals, the transaction is planned to be completed during the second half of 2016.

In a statement, Japan's MHI said: "In the coming weeks, MHI will consider conditions for proposing to EDF and Areva a potential minority stake investment into Areva NP, including ownership ratios. It will also work up a proposal of Japan-France collaborative measures for further enhancing the safety and reliability of nuclear power plants, and discuss all relevant matters towards their realization."

MHI president and CEO Shunichi Miyanaga said, "Through the years MHI, EDF and Areva have enjoyed favourable cooperation in applying their respective technologies, and I have high expectations that an investment by MHI into Areva NP would realize and strengthen the ties between the Japanese and French nuclear energy industries further, which in turn will enable us to contribute to the improvement of the quality of nuclear power plants around the world."

Previous collaboration

In 1991, the two companies formed a joint venture in the nuclear fuel cycle business, and in 2006 they concluded an agreement on broader collaboration in the field of nuclear energy. That agreement led to the creation in 2007 of the Atmea 50-50 joint venture, set up to develop, market, license and sell the 1100 MWe Atmea-1 pressurized water reactor combining both companies' technologies. An informal agreement was concluded in 2013 towards the construction of a four-unit nuclear power plant in Sinop, Turkey, based on the Atmea-1.

In addition, in 2009 Areva and Mitsubishi agreed to establish a joint venture company in the nuclear fuel fabrication business. The new company was established by restructuring the existing Mitsubishi Nuclear Fuel (MNF) company, with Areva NP taking a 30% stake in the new company.

MHI said it also "enjoys a solid relationship" with EDF. Since 2005, the Japanese company has received orders for 15 replacement steam generators for French nuclear power plants operated by the utility. "Deliveries have proceeded smoothly, and MHI has cooperated in supporting their operation," MHI said.

Areva announced on 2 November that it had signed a memorandum of understanding with China National Nuclear Corporation (CNNC) for a possible partnership, which may lead to CNNC taking a minority stake in Areva.

Researched and written
by World Nuclear News