The French government has given the green light for nuclear energy giants Areva and EDF to merge their reactor businesses in a joint venture aimed at reshaping the country's atomic energy industry landscape.
French President Francois Hollande's office announced the transaction's broad outlines on Wednesday, saying, however, the final details would be negotiated by the two companies within a month. Under the deal, France's state-owned energy giant EDF is to become "majority shareholder" in Areva's reactor activity.
The government in Paris, which holds a stake of 85 percent in EDF and 87 percent in Areva, will inject new capital "as much as necessary" in struggling Areva as part of the deal.
"The challenge isn't merely to respond to financial difficulties that Areva might encounter, but to restructure the entire sector and give it a new outlook," said an official close to President Francois Hollande.
Last year, Areva recorded massive losses amounting to some 5 billion euros ($5.6 billion) on account of costs linked to delays to its flagship next-generation EPR reactor.
Earlier this month, Areva announced a cost-cutting plan involving thousands of job cuts worldwide in an effort to slash costs. The company employs around 45,000 people, including some 30,000 in France.
Five years ago, Areva was seen as a French success story, led by swashbuckling CEO Anne Lauvergeon, as it rode the wave of the so-called "nuclear renaissance."
However, the reactor maker has suffered in recent years as interest in nuclear power has cooled after the 2011 Fukushima disaster in Japan. The company has failed to sell any new nuclear reactor since 2007.
It took a particular hit last year from delays in building its Olkiluoto III nuclear plant in Finland, but also experienced difficulties with its renewable energy contracts.
sri/uhe (AFP, AP)