France Renews Push for Nuclear Shake-Up--Update

By Inti Landauro 

PARIS--The French government has turned up the heat on the managers of the country's biggest nuclear-power companies to restructure the industry to help stem multibillion-euro losses at state-controlled equipment maker Areva SA.

Economy Minister Emmanuel Macron has asked Eléctricité de France SA--the operator of France's fleet of nuclear power stations which provide most of the country's electricity--to come to the rescue of Areva by deepening their industrial and possibly financial ties.

EDF and Areva, which are both majority-owned by the French state, have to cooperate better over the construction of nuclear reactors and tendering for international business, Mr. Macron said on Thursday. He said that he has asked both companies to make proposals in the coming weeks.

The plea falls short of calling for a full-scale merger of the two companies.

"There are industrial and financial plans, but not for the whole of Areva, just the nuclear reactor part," Mr. Macron said on French television channel BFM-TV. As well as making nuclear reactors, Areva mines uranium, produces nuclear fuel, and treats nuclear waste.

The initiative from the government is just the latest in a long-standing but inconclusive struggle to reorganize France's nuclear sector. Previous ideas ranged from the fully-fledged privatization of Areva to allowing gas utility GDF Suez to compete with EDF as a nuclear-energy provider. Changing international attitudes to nuclear power, notably after the Fukushima disaster in Japan in 2011, have complicated the task for the French government by crimping demand for new business at Areva.

France's nuclear-energy companies have also had a poor export record. In 2009, a consortium made up of Areva, GDF Suez, and French oil group Total, joined at the last minute by EDF, lost out to a South Korean bid led by Korea Electric Power Co. to build a new power station in the United Arab Emirates.

For now, Areva is working on a plan to sell assets, cut costs, reduce capital expenditure and start talks with unions over possible job cuts after posting a EUR4.8 billion ($5.4 billion) net loss in 2014, the fourth loss in as many years.

The company faces major hurdles with its contract to build a reactor in Finland, which has suffered a series of delays and cost overruns, and has also made a poor investment in uranium mining,

Mr. Macron recently said in an interview with French newspaper Le Figaro that the partnership between Areva and EDF should be strengthened, possibly "going as far as a tie-up of capital."

Write to Inti Landauro at [e-mail]

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