European Commission Approves EDF Takeover Of Areva’s Reactor Business

30 May (NucNet): The European Commission has approved French state-controlled utility EDF’s proposed takeover of New NP, the Areva Group’s nuclear reactor business, concluding that the transaction would not raise competition concerns. In a statement on 29 May 2017, the Commission said EDF plans to acquire between 51% and 75% of the capital of New NP. EDF is the largest nuclear power plant operator in the EU, while New NP focuses on the design and supply of nuclear reactors and equipment, fuel assemblies, control systems and services to nuclear power plants. Although their activities do not overlap, the two companies are major players in the nuclear industry, the one as a supplier and the other a customer. In particular, the Commission assessed the possibility of the merged company engaging in foreclosure strategies by restricting access to products, equipment and services designed or supplied by New NP. The Commission said 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. As regards the fuel assemblies market, the Commission said EDF would not have sufficient incentive to source its fuel assemblies solely from New NP. The Commission said the foreclosure of competitors “seems unlikely in the medium term”. The transaction is part of a restructuring plan to restore Areva’s competitiveness. Areva, which is 87% owned by the government, was brought to the brink of collapse last year after racking up huge losses over half a decade. The restructuring plan includes the sale of the Areva Group’s nuclear plant industrial activities to EDF. The Commission had already concluded on 10 January 2017 that France’s proposal to grant aid to Areva in the form of a capital injection of €4.5bn ($5bn) was in line with EU state aid rules.