France’s EDF allying with AREVA

French Govt: EDF, Areva In Strategic Nuclear Partnership – WSJ.com-By A.H. Mooradian and Geraldine Amiel, Dow Jones Newswires;PARIS (Dow Jones), 27 July 2010, –The French government Tuesday announced a far-reaching alliance between State-controlled utility giant Electricite de France (EDF.FR) and State nuclear engineering group Areva SA (CEI.FR), which will touch on all areas of common interest, opening the door for EDF to build a stake in Areva and perhaps putting it firmly at the center of France’s nuclear sector.

The breadth and depth of the government’s new plans for Areva, of which it controls over 90%, reach well beyond the expected result of its months-long strategic review of the country’s nuclear sector. Up until now, President Nicolas Sarkozy had been expected to announce a joint French industrial effort toward capturing overseas reactor contracts by the big players in France’s nuclear industry, which also include oil major Total SA (TOT) and power plant and rail engineering group Alstom SA (ALO.FR).

“The decisions taken are aimed at reinforcing the French nuclear sector, a strategic element of the energy and industrial policy of France,” Sarkozy’s office said in a statement.

The result of the strategic study, which was handled by a high-level commission, squarely presents EDF and its feisty chief executive, Henri Proglio, with an apparent victory over Areva, with which they have been vying for advantage in the nuclear industry. EDF, which is 87% owned by the State, has aspirations to be a leading global power in building and operating nuclear power stations. EDF operates France’s 58 nucelar power reactors and has been gobbling up substantial nuclear assets in the U.K. and U.S. over the past couple years.

Meanwhile, Areva is one of the world’s largest producers of nuclear reactors. Led by its formidable, though politically weakened, chief executive, Anne Lauvergeon, it has ambitions to dominate the global market, building its latest-generation EPR reactor around the world and introducing it next-generation reactor ATMEA. There have been persistent rumors that Sarkozy will fire Lauvergeon before her mandate ends next year. It wasn’t immediately clear how Lauvergeon’s future now is shaping up. Areva couldn’t immediately be reached for comment.

UPDATE: French Govt: EDF, Areva In Strategic Nuclear Partnership – WSJ.com