PARIS: Atomic energy giant Areva on Thursday agreed to sell a majority stake of its nuclear reactor unit to electricity group EDF as part of an awaited reconfiguration of the French sector.
EDF said in a statement that the long-time energy rivals "signed an agreement of understanding on June 30" under which the electricity utility agreed to purchase between 51 and 75 percent of nuclear reactor unit Areva NP for an amount valuing the entire affiliate at 2.7 billion euros ($3 billion).
The amount is less than the four billion euros Areva had sought for the reactor subsidiary, but will provide part of the seven billion in financing Areva says it will need by 2017.
Areva also said it will seek a further 1.2 billion euros in funds through internal financing operations, spending cuts and further assets sales.
The company is now expected to focus on its uranium mining and nuclear waste treatment activities, awaiting significant recapitalisation the French government previously promised as part of its mandated restructuring of the country's energy sector.
Once the world-beating, one-stop-shop in the global civil nuclear sector, Areva encountered significant financial problems following the 2011 Fukushima disaster in Japan, as several countries sought to reduce or even eliminate nuclear energy, like Germany's plans to phase it out by 2022.
Meanwhile, Areva has run into major construction difficulties with its first EPR reactor in Finland, which is now expected to begin operating in 2018 -- nine years late, and at nearly four billion euros ($4.5 billion) in costs to Areva.
As losses mounted, so did Areva's debt, which reached six billion euros at the end of the first half of 2015.
As a result, the French government has been pushing for greater partnership or quasi-merger of long-time rivals Areva and EDF to save a nuclear activity that French Economy Minister Emmanuel Macron has called "an industry of the future in France and abroad."
The French state owns 87 percent of Areva and 84 percent of EDF.
The sale of the nuclear reactor unit to EDF marks the end of Areva's formerly profitable full-service model, which offered clients all aspects of development ranging from conception and construction to waste treatment.
In May Areva said it would slash up to 6,000 jobs worldwide amid one billion euros of cost-cutting by 2017.