EDF Signs Agreement to Buy Areva's Nuclear Reactor Unit
November 16 2016 - 5:14AM
Dow Jones News
By Inti Landauro
PARIS--French state-controlled power utility Eléctricité de
France SA (EDF.FR) Wednesday signed an agreement to buy the nuclear
reactor unit of Areva as part of a rescue package for the
beleaguered engineering group agreed earlier this year.
EDF will buy as much as 75% in Areva NP, as the unit is known,
in a deal that values it at 2.5 billion euros ($2.68 billion). EDF
plans to sell a 24% stake to other investors in the future.
The deal excludes a series of potential liabilities related to
the nuclear reactor manufacturing unit, such as potential losses
related to the construction of a reactor in Finland and possible
losses related to deficient components made at the Le Creusot
plant. Those potential liabiliies will remain in Areva.
The takeover is part of a EUR8 billion plan to rescue Areva
after five years of consecutive losses.
In recent years, Areva has lost ground to competitors from
Russia, South Korea and the U.S., while demand for new nuclear
reactors has plummeted following the Fukushima nuclear disaster in
Japan in 2011
The government, which owns around 85% in Areva, will inject EUR5
billion in different parts of the company. Areva will seek to raise
EUR2.9 billion from the sale of units that make nuclear-submarine
engines, wind turbines and nuclear reactors for research, after the
sale of a majority stake of Areva NP to EDF.
The sale to EDF of Areva NP is expected to be effective in the
second half of 2017 and hinges on the results of investigations
carried out by the French regulator on the construction of a new
reactor in Flamanville and on Areva's steel mills.
Write to Inti Landauro at inti.landauro@wsj.com
(END) Dow Jones Newswires
November 16, 2016 04:59 ET (09:59 GMT)
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