French multinational AREVA agreed on Tuesday to sell its nuclear reactor business to French state-controlled power utility Eléctricité de France SA for 2.5 billion euros ($2.68 billion), as part of a mass restructuring the company announced earlier this year.
The overhaul is expected to raise at least 5 billion euros for AREVA and its newly formed entity NewCo, a spinoff that will focus on nuclear fuel cycle services, through government investment and asset sales. As drawn up, the French state utility will control up to 67 percent of NewCo, directly and indirectly, while the rest of the company is available for private investment.
According to the terms of the deal, which AREVA released Wednesday, EDF will buy up to 75 percent of the reactor business. The deal is expected to close by the end of 2017.
AREVA nuclear projects in China, Finland, and France are years off schedule, Reuters reported Wednesday. The time slips are a worry for EDF, which wants AREVA to head construction of two facilities at Hinkley Point in the United Kingdom, according to the report.
“Today, we take a major step forward in the refounding of the French nuclear industry,” EDF Group Chairman and CEO Jean-Bernard Lévy said in a statement. “With EDF as a leader of the French nuclear sector, this transaction will enable our industry to be more efficient in carrying out major projects such as the ‘Grand Carénage’ of the French fleet and the construction of new nuclear plants. We will thus be stronger and more competitive to conquer new international markets.”
“This signature marks an important stage in the refocusing of AREVA on fuel cycle activities, our core business,” AREVA Group CEO Philippe Knoche said in a statement. “The conclusion of these agreements strengthen our resolve to continue to implement our action plan.”
