July 8, 2015 / 6:11 AM / 4 years ago

EDF takeover could hit Areva order book: parliament report

PARIS (Reuters) - French state-controlled utility EDF’s planned takeover of the nuclear reactor arm of Areva could hit Areva’s order book as utilities may not want to buy equipment from another utility, a parliament report released on Wednesday said.

In June, the French government approved EDF’s plan to take over debt-laden Areva’s core reactor building unit, and said it would recapitalise the loss-making company.

“It is possible that nuclear plant operators would hesitate to place orders with the new Areva, which in theory could become a competitor of its own clients,” said the report, which was led by Socialist MP Marc Goua and The Republicans MP Herve Mariton.

They added, however, that some potential first-time buyers of nuclear plants may prefer to deal with a company that both builds and operates nuclear plants.

The report also recommends giving the new reactor business - in which Areva would keep a minority stake - a large degree of autonomy and said other investors should be given a chance to invest in the company in order to diversify its shareholdership.

They also recommend that Areva itself - which will be refocused as a nuclear fuel group after the sale of the reactor unit - should open its capital to foreign investors, notably Chinese.

Goua and Mariton also said a final agreement about the future of Areva would have to wait for the outcome of an investigation into weak spots discovered in the steel of the vessel of a reactor under construction in Flamanville, France.

Last week, a source familiar with the situation told Reuters that EDF is still months away from formulating a firm offer for a majority stake in Areva’s reactor unit.

The French government had asked the two firms to reach an agreement by July 3, but that deadline passed without an announcement.

The French government is expected to discuss the future of the country’s nuclear industry on Wednesday, political sources told Reuters on Tuesday.

Reporting by Benjamin Mallet, writing by Geert De Clercq; Editing by Susan Fenton

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