June 17 (Bloomberg) -- Areva SA Chief Executive Officer Anne Lauvergeon was denied a third term after the French government replaced her weeks before her contract expires, denting the career of one France’s most high-profile executives.
Lauvergeon, 51, will be succeeded at the world’s largest maker of nuclear plants by Luc Oursel, Areva’s head of marketing and projects, President Nicolas Sarkozy’s government said late yesterday. Lauvergeon this week repeated her desire to extend her tenure to a third term.
The decision ends years of speculation about Lauvergeon’s career, and comes as the future of atomic energy is called into question following the nuclear disaster in Japan in March. Her tenure at the state-controlled company was marred by construction delays and cost overruns on a nuclear plant in Finland, as well as spats with Electricite de France SA, Areva’s biggest customer, over contracts, products and export strategies.
Oursel will “put into action the plan to improve the company’s performance and build its competitiveness and development,” the government said in a statement.
Oursel’s previous jobs include posts in government and at Schneider Electric SA and logistics company Geodis. He joined Areva in 2007 and took charge of its nuclear operations in 2010 before becoming chief operating officer in charge of marketing, projects and the international business at the start of this year.
Lauvergeon, trained as a physicist at the Ecole des Mines de Paris, worked at the French atomic energy agency in the 1980s before joining the staff of former President François Mitterrand. She then became a partner at what is now called Lazard Ltd. In 1999, then-President Jacques Chirac tapped her to run Cogema, a state-owned nuclear fuel business.
In 2001, Lauvergeon engineered the three-way merger that turned Paris-based Areva into a one-stop shop selling nuclear technology, fuels and services. She extended the company’s uranium mine portfolio with the $2.5 billion purchase of South Africa’s UraMin Inc. in 2007, and has lifted investment in nuclear fuel production.
Under Lauvergeon’s leadership, Areva also designed the so-called evolutionary pressurized reactor, an advanced plant under construction in Finland, France and China. While the technology is more complex, it has safety features including a double concrete shell and core catcher in case of a meltdown.
Lauvergeon, who turned down Sarkozy’s offer to become a government minister in 2007, has also resisted calls for a merger between Areva and French turbine and train-maker Alstom SA in recent years, and has refused to allow EDF to get seats on Areva’s board to preserve the nuclear company’s independence.
Areva’s supervisory board in January gave three of its members a mandate to prepare for “the renewal or succession” of executives whose terms end in June, fanning speculation about a possible shakeup at the top of the company.
The Olkiluoto 3 project in Finland has forced Paris-based Areva to set aside 2.6 billion euros ($3.7 billion) of provisions since the start of the project in 2005. Areva expects the construction of the first-of-a-kind 1,650 megawatt nuclear reactor to be completed by the end of 2012, more than three years behind scheduled.
Shares of Areva have lost 28 percent this year, hurt by the nuclear accident in Fukushima, Japan. The company has dropped its targets for revenue, margins and cash generation for this year and next after the catastrophe. France owns more than 80 percent of Areva.
Areva had previously predicted “significant” backlog growth, rising revenue and an operating margin of more than 5 percent for 2011. For 2012, the company had targeted revenue of 12 billion euros, a double-digit operating margin, and a “significantly” positive free operating cash flow.
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