The French state signaled it wants Electricite de France SA, the state-controlled power company, to buy a majority stake in Areva SA’s atomic reactor business to shore up the troubled nuclear group.
The government will help by injecting as much funding as necessary into Areva, President Francois Hollande’s office said in a statement. The companies have a month to iron out details of the plan, which calls for EDF to become the majority owner of Areva NP, the unit that makes atomic reactors and fuel.
“This industry is crucial to preserve our energy independence,” the government said. “The state will recapitalize Areva, acting as a prudent investor, as much as necessary.”
Areva SA, which also mines and enriches uranium, will keep a stake in Areva NP, the statement said.
Areva, also controlled by the government, needs to shore up its finances after record losses caused by mismanaged projects as well as a retreat from atomic energy in countries including Japan and Germany.
EDF and Areva will create a venture to design and build new reactors, the government said. The companies will discuss ways to cut risks linked to ongoing Areva NP projects, it said.
Areva will require as much as 5.5 billion euros ($6.2 billion) by the end of 2017, Natixis analyst Philippe Ourpatian and a colleague wrote in a June 2 research note.
EDF last month offered about 2 billion euros for Areva’s reactor operations, a person familiar with the situation said at the time.
Both Areva and EDF have raised the possibility in the past of forging ties with Chinese partners and are planning to develop two reactors in the U.K. with China General Nuclear Power Corp. and China National Nuclear Corp.