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State electricity giant EDF to link with Areva in nuclear energy deal

Text by News Wires

Latest update : 2010-07-29

The French government announced on Tuesday that state-owned electricity firm EDF will sign a broad partnership deal with Areva, which manufactures nuclear reactors, to help France regain a leading role in the nuclear energy sector.

 

REUTERS - The French government said state-owned electricity giant EDF and nuclear reactor maker Areva would sign a wide-ranging partnership to help the country regain its leadership in nuclear energy.
 
After a report on the health of France's nuclear sector was published on Tuesday, President Nicolas Sarkozy's government called for closer coordination between the companies to offset recent losses of contracts to Asian rivals.
 
The government will study the possibility of EDF taking a stake in Areva, according to a statement released by Sarkozy's office. The government confirmed that Areva would sell about 15 percent of itself by the end of the year, and said discussions with potential partners were underway.
 
Francois Roussely, who ran EDF between 1998 and 2005, was asked by the government to be the head of the commission and to make proposals to fix the nuclear sector.
 
Areva, which is 90 percent owned by France, wants to raise about 3 billion euros from new shareholders, which could include foreign companies. The proceeds would fuel an international expansion plan that could cost up to 10 billion euros from now until 2012.
 
In December, a French consortium, including Areva, utility group GDF Suez and oil company Total, lost a $40 billion nuclear project in Abu Dhabi in December to a Korean group.
 
Analysts expect the government to try to end sniping among executives at some of the leading energy companies, notably Areva CEO Anne Lauvergeon, EDF's Henri Proglio and Alstom's Patrick Kron.
 
The report is silent on the question of whether Lauvergeon will stay as Areva CEO given the expected rapprochement with EDF. Lauvergeon has fought for Areva to remain independent.
 
In recent months, speculation has swirled in markets and among France's policymakers and the media on whether the state would replace Lauvergeon in its bid to reorganize the nuclear sector.
 
An Areva spokesman said the company welcomes the conclusions of the report. Asked what impact the report would have on the position of Lauvergeon, the spokesperson said, "The problems [of the French nuclear sector] were never about the people for us."
 
Lauvergeon's term runs through June 2011, the spokesman said.
 
A spokesperson for EDF declined to comment on the government's report on Thursday night.

 

 

Date created : 2010-07-28

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