EU approves Areva-EDF nuclear reactor takeover

EDF’S proposed takeover of the Areva Group’s nuclear reactor business has been cleared by the European Commission, which concluded that the transaction would not affect healthy competition in the sector.

The acquisition is important for France, which uses the two companies to spearhead its export efforts against competition from Russia's Rosatom and Japan's Hitachi.

French state-controlled EDF, the EU's largest nuclear plant operator, had agreed to acquire a 51–75% stake in Areva NP, which designs, manufactures and services nuclear reactors and is worth about €2.5bn (US$2.8bn).

On Monday, the takeover was approved by the EU antitrust regulator, which concluded that “the proposed transaction is unlikely to raise competition concerns.”

Points raised included that competitors in the design and construction of new reactors would not be pushed out, “due to the different market characteristics and the number of suppliers and also the number of nuclear plants not operated by EDF.”

Regarding services to existing plants and for instrumentation and control systems, it was deemed that the new business had every interest in proposing high-quality products and services to as many potential customers as possible, while continuing to use a diversified group of suppliers to operate competitively. The possibility of EDF restricting the supply of fuel assemblies to other operators of nuclear power plants in the EEC was ruled out, as this would be a breach of existing contracts.

Areva, which is 87% government-owned, reported net losses of €4.8bn, €2bn and €665m for the years 2014–16. Its European pressurised reactor technology, which is due to be used at the UK’s Hinkley Point nuclear power station, has encountered delays and large cost overruns. For instance, Areva’s reactor in Olkiluoto, Finland, is nine years late and €5bn over budget. The Flamanville III reactor in France is €7bn over budget, six years behind schedule and still under construction.

In January, the EU Commission approved a restructuring plan including €4.5bn of state aid for the struggling business, saying it would make the company viable without unduly distorting competition. Following the takeover, the remainder of Areva will consist predominately of a uranium mining and nuclear fuel business.