MHI buys stake in Areva

Mitsubishi Heavy to buy stake in French nuclear giant's reactor subsidiary

http://ajw.asahi.com/article/business/AJ201510310044

October 31, 2015

THE ASAHI SHIMBUN

Mitsubishi Heavy Industries Ltd. (MHI) will take an equity stake in Areva NP, the reactor manufacturing subsidiary of struggling French nuclear giant Areva, the Japanese company said Oct. 30.

MHI also said it is discussing a deal to take a stake in the parent company of the state-owned group of nuclear power businesses.

“The capital investment will be highly recoverable from the initial investment,” Mitsubishi Heavy President Shunichi Miyanaga said at a news conference in Tokyo to announce the company’s financial statements. “We believe there is no potential risk in the deal.”

Miyanaga also said MHI is “productively considering” a proposal to invest in the parent company, which specializes in fuel-related businesses.

The leading Japanese heavy machinery manufacturer and Areva, which is trying to rejuvenate its business, have joined forces to develop an advanced medium-size nuclear reactor called Atmea 1. It will be delivered to a Turkish nuclear power plant currently under construction.

MHI decided to inject capital into Areva NP because the reactor maker’s advanced technology is essential in developing Atmea 1 and the nuclear venture in Turkey is projected to generate long-term profits.

Areva and the state-owned power utility Electricite de France SA (EDF), which plans to hold an equity stake in Areva NP, are willing to sell maximum 34 percent stakes in Areva NP.

MHI and the two French entities will negotiate the scale of the investment before signing a basic agreement in January or February next year.