Binding agreements signed for sale of New NP
Areva SA and EDF have signed definitive binding agreements setting the terms of the sale of New NP, Areva NP's nuclear reactor operations. The transaction is scheduled to close by the end of this year. The sale price for 100% of New NP's equity has been confirmed at €2.5 billion.
French utility EDF agreed in July 2015 to take a stake of between 51% and 75% in Areva SA's reactor unit in a government-backed plan to revitalise the country's nuclear power industry. The restructuring includes the government granting a capital injection of €4.5 billion ($5.4 billion) into Areva. The reactor operations to be sold have been transferred to a subsidiary wholly owned by Areva NP, referred to as 'New NP'. Contracts for the Olkiluoto 3 (OL3) EPR project in Finland and for resources required to complete that project, and some contracts relating to components forged in the Le Creusot plant, are not included in the sale. Those contracts will remain within Areva.
"The signing of these definitive agreements marks the culmination of more than two years of work to implement the refounding of the French nuclear industry, with EDF at the head," said EDF Chairman and CEO Jean-Bernard Lévy. "The integration of New NP within the EDF group starting on 1 January 2018 will help our industry increase in performance and efficiency in the implementation of major projects such as the Grand Carénage [life extension programme], and become more competitive in the construction of new nuclear power plants as many countries recognise the key role of nuclear energy in the transition towards low-carbon power generation."
Areva SA Chairman Philippe Varin said, "The sale of New NP marks a major step in the restructuring of the Areva Group and provides New NP and its employees with an environment conducive to its development."
Areva and EDF announced on 22 December that they had signed the definitive agreements for the sale. The agreements had been approved by their respective boards on 13 and 14 December.
The agreements foresee EDF acquiring 75.5% of New NP's capital on the basis of an adjusted valuation of €2.47 billion (for 100% of the capital), with no transfer of financial debt. That amount is eight times the business's earnings before interest, tax, depreciation and amortisation.
In a joint statement, the companies noted that this amount may be adjusted upwards or downwards, according to the definitive accounts to be established at the date of completion of the transaction, scheduled for 31 December 2017. It may also be subject, depending on the reaching of certain performance targets measured after the completion date, to a price complement of up to €245 million.
In May this year, French nuclear engineering company Assystem made an offer of €125 million for a 5% stake in New NP. In July, Japan's Mitsubishi Heavy Industries (MHI) formally decided to take a 19.5% stake in New NP.
Areva and EDF said the acquisition of stakes in New NP by MHI and Assystem "should occur simultaneously with the transaction between EDF and Areva SA".
Researched and written
by World Nuclear News
