Areva to cut 14 per cent of global workforce

Areva is to cut 6,000 jobs over the next three years — 14 per cent of its global workforce — as it continues to discuss with EDF and the French government options for the restructuring of the company.

Having reported a €4.8bn loss last year, Areva said it was also lowering wages for surviving staff in an attempt to deliver the bulk of a €1bn cost reduction target.
Areva building
Two remaining options for the destiny of the company are on the table at the moment.

Sources close to the discussions told the FT that under the first option, EDF, which is 85 per cent government owned, would acquire the nuclear reactor and engineering businesses of Areva, taking control of the process of designing and building new reactors as well as maintaining existing plants.

This deal, which could be worth as much as €3bn, would result in the break-up of Areva. But, at the same time, it would limit the amount of cash the state has to contribute to Areva in a capital raising, which is expected to accompany such a deal.

The second option — which people close to the talks say is preferred by the managements of Areva and EDF — only the smaller engineering business of Areva would be sold to EDF.

This would keep Areva relatively intact but, with EDF paying only between €300m and €1bn, it would necessitate a much bigger capital contribution from the cash-strapped French government to Areva.

Both deals would require all parties to agree a deal on price, which has been a contentious issues in recent weeks.

To help mitigate the cost to the state of any capital raising, Areva will consider approaching its existing Chinese partners, according to people familiar with the plans.

 “The state needs to decide the best way to preserve one of the country’s great industries,” said one person familiar with the talks.

Areva, troubled by the fallout from Fukushima, increased competition and cost overruns in its Finnish project, has not sold a new nuclear reactor since 2007.



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