EDF to buy majority stake in Areva nuclear reactor business

 EDF to buy majority stake in Areva nuclear reactor business

Caption: Olkiluoto 3

France state-owned utility Electricite de France (EDF) agreed to buy a majority stake in the nuclear reactor development unit of Areva valued at 2.7 billion euros ($3 billion).
As part of the deal, EDF will own a 51 percent stake in Areva NP, and Areva will own 25 percent while both companies will seek other investors, according to news reports. The French government owns more than 85 percent of both Areva and EDF, and brokered the deal with the intent of saving Areva’s fledgling unit. Areva NP lost money for the past four years and reported a loss of 4.8 billion euros ($5.2 billion) last year due to delays at nuclear new builds and a lack of business following the 2011 Fukushima accident. Areva said it would need at least 7 billion euros ($7.6 billion) to get back on its feet, The Wall Street Journal said.
EDF said in the article it would make sure it wasn’t exposed to any future liabilities from the new reactors under construction at Olkiluoto 3 in Finland. Areva NP said it would cut between 5,000 and 6,000 jobs across the group, including 3,000 to 4,000 in France by the end of 2017, and also plans to sell assets to raise 400 million euros ($437.1 million) plus 1.2 billion euros ($1.3 billion) in new financing. Areva also has plans to create a joint venture for the design, project management and marketing of new reactors.
In other Areva NP news, the company announced that Bernard Fontana is the unit’s new president and CEO. Fontana previously was the CEO of Holcim Ltd. He began his career with Groupe SNPE in France. In 1998, he was appointed head of U.S. operations and, from 2001 to 2004, was a Member of the Executive Committee in charge of Chemicals and of Industrial Explosives.
Fontana earned his degree in engineering from the Ecole Polytechnique and the Ecole Nationale Supérieure des Techniques Avancées in Paris.
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