EC Approves Areva Nuclear Sale to EDFDavid Wagman | May 30, 2017
The European Commission in late May approved EDF's takeover of Areva's nuclear reactor business under EU merger regulations.
The transaction, expected to be completed by the end of 2017, is "unlikely to raise competition concerns," it said, according to a report by World Nuclear News.
French utility EDF agreed in July 2015 to take a stake of between 51% and 75% in Areva's reactor unit in a government-backed plan to revitalize France's nuclear power industry. Contracts for the Olkiluoto 3 EPR project in Finland and for resources required to complete that project, and some contracts relating to components forged in the Le Creusot plant, are not included in the sale. Those contracts will remain within Areva NP.
The Commission said it had "assessed the probable effects of the transaction on the ability and incentives of the merged entity to engage in foreclosure strategies by restricting access to products, equipment and services designed or supplied by New NP and to EDF, as a customer."
On the market for the design and construction of new reactors, the Commission concluded that EDF and New NP "would not be in a position to push out their competitors because of the different market characteristics and the number of suppliers, and also the number of nuclear plants not operated by EDF."
Concerning markets for services to existing plants and for instrumentation and control systems, the Commission concluded New NP had "every interest in proposing high-quality products and services to as many potential customers as possible". In addition, EDF "would not be in a position to foreclose New NP's competitors and would have every interest in continuing to source its supplies from a diversified group of suppliers."
EDF would not have "sufficient incentive" to source its nuclear fuel assemblies solely from New NP, the Commission said. The company is also unlikely to restrict the supply of fuel assemblies and related services to other nuclear power plant operators in the European Economic Area, "which would be in breach of existing contracts."
The Commission approved the restructuring of the Areva group in mid-January, ruling that the French government's plan to grant a capital injection of €4.5 billion ($5.0 billion) into Areva did not breach European Union state aid rules. It ruled that the aid payment was subject to certain conditions, including authorization of the sale of Areva's reactor business to EDF under EU merger rules. Authorization of that transaction means that this condition has now been met.
Areva began the process of splitting off its nuclear fuel cycle activities into NewCo in August 2016, combining the Areva Mines, Areva NC, Areva Projects, and Areva Business Support companies and their respective subsidiaries. In January, Mitsubishi Heavy Industries and Japan Nuclear Fuel Limited agreed on the main terms of their respective acquisitions of 5% stakes in NewCo for €250 million.