CNNC considers stake in Areva

Nuclear plant operator China National Nuclear Corp said on Tuesday that it was considering taking a minority stake in French nuclear group Areva SA.

CNNC said it has already inked an agreement with Areva that will cover the entire cycle of nuclear fuel activities, including uranium mining, front end, recycling, logistics, decommissioning and dismantling.

In addition, the Chinese company may work too with French state-controlled power utility Electricite de France SA to expand exports of mid-to-large nuclear reactors in the global market.

It is also planning to build a global nuclear supply chain and logistics platform jointly with EDF, and seek further cooperation in the fields like nuclear safety, operation, maintenance, engineering and research.

Philippe Varin, Areva's chairman, said that the cooperation "offers numerous opportunities" for the French company and has become "an integral factor for its future success".

The agreement, which was signed in Beijing during a visit by French President Francois Hollande, follows a joint declaration between China and France signed in June.

EDF and Areva are both state-owned companies, with the government holding 84.5 percent and 87 percent of their shares, respectively.

Earlier reports said EDF was planning to buy Areva's reactor building arm Areva NP in June. The current deal with the Chinese company will not hamper the acquisition that is already underway, Areva said.

The French government was reportedly keen on tie-ups between Chinese nuclear firms and both Areva and EDF. Both these companies are long-standing partners of CNNC and China General Nuclear Power Corp.

Zhao Chengkun, vice-chairman of the China Nuclear Energy Association, said France is a nuclear country with advanced technologies, and the partnership will help the Chinese nuclear players compete effectively in the global market.

Areva lost around 5 billion euros ($5.3 billion) in 2014, compared with a 500 million euro loss the year earlier because of resultant delays in projects around the world, forcing the French government to push for a restructuring of the country's nuclear industry.

The Paris-based company has launched a restructuring program designed to bring its debts under control with a target to save 1 billion euros each year by the end of 2017.

Analysts said that it has also become important for the French company to work with Chinese partners in its efforts to return to the black.

In 2014, Areva signed a series of agreements with CNNC, including the development of a used fuel treatment and recycling facility project.

The two nuclear companies will also expand their cooperation in operational support and maintenance facilities in the near future.