DOC - Europa

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IP/04/1189
Brussels, 6 October 2004
Commission clears uranium enrichment equipment
joint venture between AREVA and Urenco
The European Commission has granted regulatory approval to a joint venture
between the French nuclear group AREVA and Urenco, a company set up by
the governments of the UK, Germany and the Netherlands. The approval was
possible after the Commission received guarantees that Areva and Urenco
would act independently, in particular when deciding on future capacity, and
that Euratom Supply Agency would increase its monitoring means.
By the proposed transaction AREVA will acquire joint control over Enrichment
Technology Company (ETC), which is active in the development and
manufacturing of centrifuges for uranium enrichment. Centrifuge technology offers
significant advantages over the older gas diffusion technology currently used by
AREVA. In the future, ETC, formerly under sole control of Urenco, will supply its
parents and also third parties. AREVA and Urenco will however remain competitors
on the downstream market for enriched uranium.
The merger was jointly referred to the Commission by France, Sweden and
Germany in April 2004. On 22 June 2004, the Commission started an in-depth
investigation after having initially identified competition concerns.
This investigation showed that concerns regarding the emerging market for
enrichment equipment were unfounded, mainly because Areva is considerably
lagging behind its competitors in terms of technology. There are today three
manufacturers of centrifuges -- Urenco, JNFL from Japan and Tenex from Russia - while the U.S. company USEC is also expected to have centrifuge equipment
operational by 2008.
The Commission’s investigation, however, confirmed its concerns in the market for
enriched uranium, which amounts to a large part of the total fuel costs for nuclear
power plants. The Commission was concerned that the proposed concentration
could lead to the creation of a joint dominant position in relation to the provision of
enriched uranium in the European Union, in particular by the joint control over
enrichment capacity increases. The Commission was also concerned that the joint
control of ETC could also be used to co-ordinate the provision of enriched
uranium.
In order to eliminate the Commission’s concerns, AREVA and Urenco will each
remove their respective veto rights in relation to any future capacity expansions.
Secondly, the flow of commercially sensitive information between ETC and its
parents should be prevented by a series of measures which will be closely
monitored. Thirdly, the European Supply Agency (“ESA”) has agreed to play an
increased monitoring role. The parties have committed to supply ESA with
additional information, which will enable ESA to closely monitor the provision and
pricing of enriched uranium and respond, if necessary.
AREVA, which is controlled by the French state, is active in three main areas: all
stages of the nuclear power business, the connector business, and transportation
and distribution of electricity. It is, in particular, active on the uranium enrichment
services market through its subsidiary Eurodif which owns the largest European
enrichment plant.
Urenco Limited was established under the umbrella of the Treaty of Almelo in the
1970s. The shareholders of Urenco include BNFL, Ultra -Centrifuge Nederland
Limited, RWE and EON. Urenco consists of two main divisions: ETC and Uranium
Enrichment Company, active in the provision of enriched uranium.
The nuclear industry is highly regulated both with regard to the security of supply
and to nuclear safety measures. Under the Euratom Treaty, the ESA monitors the
Community wide supply and imports of enriched uranium
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