EU Approves French State Aid for Areva

13 January 2017

The European Union approved Tuesday a restructuring plan for French nuclear group Areva SA, saying

a planned EUR4.5 billion ($4.76 billion) capital injection was in line with the bloc's state-aid rules.

The European Commission, the EU's executive arm, said the planned state aid is subject to conditions,

including a positive conclusion to tests being conducted by the French Nuclear Safety Agency, and

approval of the divestment of Areva's reactor business under EU merger rules.

The restructuring plan "will allow the company to become viable without unduly distorting competition

in the Single Market," the commission said.

EU rules allow state support to ailing companies, but only if the firms have reasonable prospects of

viability and if the program is designed to have a limited impact on competition.

Areva is a listed group, of which the French state owns, directly and indirectly, 86.5%. The group is

active in the whole range of activities around the full nuclear fuel cycle. The situation of the civil nuclear

market post-Fukushima, together with the firm’s own structural problems and business choices, led

to Areva experiencing serious financial difficulties for over five years.

Companies in financial difficulty can receive state aid only for the objective of restoring their long-term

viability. Aid granted to companies in difficulty is highly distortive of competition as it artificially keeps

a company in the market that would otherwise have left it. It can therefore only be granted under strict

conditions.

In particular, the Commission’s 2014 Guidelines on the rescue and restructuring of non-financial

companies require beneficiaries to work out a sound restructuring plan that allows them to achieve

long-term viability on the basis of realistic assumptions, in order to ensure that they do not continue

to seek public aid instead of competing on the market place on their own merit. The plan must include

measures to limit distortions of competition arising from the public aid. Furthermore, the beneficiary

needs to make a significant contribution of its own to the costs of restructuring. Lastly, the undertaking

may receive rescue and restructuring aid only once in any ten-year period.

By ensuring compliance with these conditions, the Commission maintains fair and effective competition

between different undertakings and technologies in the energy market, like in other sectors.

The non-confidential version of the decision will be made available under the case number SA.44727

in the State Aid Register on DG Competition’s website once any confidentiality issues have been

resolved. State aid decisions newly published in the Official Journal and on the internet are listed in

the State Aid Weekly e-News.