The French government on Wednesday announced that nuclear giant Areva and state-owned Eléctricité de France (EDF) will merge their nuclear reactor businesses.
"EDF aims to become majority shareholder of Areva NP (formerly Framatome), the subsidiary of the nuclear reactor group, while the later will retain a strategic stake in this subsidiary," the Elysee annouced in a statement after an official summit meeting of President Francois Hollande, Prime Minister Manuel Valls and four concerned ministers, according to the Ladepheche France.
"From now on, the activities of design, project management and marketing of new reactors EDF and Areva will be reconciled in a dedicated company," President Hollande's office further said.
The new joint venture will be called Areva NP, and EDF will be the majority shareholder. The French government will recapitalize struggling Areva "to the extent necessary", DPA reported. The government owns an 85 percent stake in EDF and an 87 percent stake in Areva.
"This industry is crucial to preserve our energy independence. The state will recapitalize Areva, acting as a prudent investor, as much as necessary," the government said, according to Bloomberg.
After the Elysee announcement, Areva assured that it will work in a spirit of complete cooperation with EDF to implement the decision of the state. Areva employs around 44,000 people, and Areva NP, the nuclear reactor subsidiary, employs approximately 15,000.
The Employees Union reacted strongly, saying the merger is "a grave looting organised for the benefit of EDF." "If it is China, it might be a plunder of skills," a Union leader told Ladepheche France.
Areva registered $5.46 billion in annual losses this year due to costs linked to delays to its flagship next-generation EPR reactor, DW reported. The company was viewed as a French success story a few years back, but it recently announced thousands of job cuts worldwide in an attempt to reduce costs.
