MHI to Invest in AREVA

Mitsubishi Heavy Industries, Ltd. (MHI) has begun mulling a concrete proposal toward making a minority stake investment in AREVA NP, a group company of the French comprehensive nuclear energy firm AREVA. AREVA NP specializes primarily in nuclear power plant (NPP) services (including engineering), fuel supply and equipments supply, and MHI's potential investment in the company aims to contribute to further enhancement of the safety and reliability of NPPs through a stronger alliance between France and Japan based on the development of the latest nuclear reactor by a joint venture (JV) established by MHI and AREVA NP.

AREVA NP, a group company of AREVA, is contemplated to be acquired by Électricité de France S.A. (EDF), a leading French utility under whose leadership AREVA NP will form a new business structure.

MHI and AREVA have a robust track record of cooperation through the years. In 1991 the two companies established a JV in the fuel cycle business, and in 2006 they concluded an agreement on broader collaboration in the nuclear energy field. This agreement led to the creation in 2007 of ATMEA, an equally owned JV between MHI and AREVA NP that subsequently developed the "ATMEA1," a state-of-the-art pressurized water reactor (PWR) in the 1100 MWe (megawatt electrical) class integrating the technologies of the two JV partners.

In 2013 an informal agreement was concluded toward the adoption of four units of the ATMEA1 at an NPP in Turkey, and other countries, notably the emerging economies, are also considering the reactor's adoption. In addition, in 2009 AREVA NP made a capital investment into Mitsubishi Nuclear Fuel Co., Ltd., leading to the formation of a business structure encompassing all aspects of the nuclear fuel business, from engineering and development to manufacture and sales.

MHI also enjoys a solid relationship with EDF. Since 2005 the Company has received orders for a total of 15 replacement steam generators for NPPs operated by EDF in France. Deliveries have proceeded smoothly, and MHI has cooperated in supporting their operation.

In reference to MHI's current mulling of a concrete proposal for investing into AREVA NP, Shunichi Miyanaga President and CEO spoke of the strong ties already in place between the companies involved. "Through the years MHI, EDF and AREVA have enjoyed favorable relationships of cooperation applying their respective technologies, and I have high expectations that an investment by MHI into AREVA NP would realize and strengthen the ties between the Japanese and French nuclear energy industries further, which in turn will enable us to contribute to the improvement of the quality of nuclear power plants around the world."

In the coming weeks MHI will consider conditions for proposing to EDF and AREVA a potential minority stake investment into AREVA NP, including ownership ratios. It will also work up a proposal of Japan-France collaborative measures for further enhancing the safety and reliability of NPPs, and discuss all relevant matters toward their realization.