EDF Becomes Biggest Shareholder in Constellation

By Tara Patel

Sept. 9 (Bloomberg) -- Electricite de France SA, the biggest operator of nuclear reactors in the world, raised its stake in Constellation Energy Group Inc. to 9.51 percent, making it the largest shareholder in the U.S. power marketer.

The purchase is part of the joint-venture agreement reached by the companies in July, 2007, Paris-based Electricite de France said in an e-mailed statement today. The French government-controlled company raised its stake in Baltimore- based Constellation from a previous 4.97 percent by buying shares in the market. No price was given for the transaction.

``EDF is moving faster than expected into the U.S.,'' Emmanuel Retif, analyst at Raymond James Asset Management, said by telephone from Paris. Under the deal signed last year Electricite de France could acquire as much as 9.9 percent of Constellation, including 5 percent within 12 months.

``The strengthening of EDF's shareholding in Constellation Energy reflects the company's commitment to nuclear renewal in the U.S.,'' Electricite de France Chief Executive Officer Pierre Gadonneix said in the statement, adding that the first phase will be to build, operate and invest in four European Pressurized Reactors.

Electricite de France fell 1.605 euros, or 3 percent, to 51.90 euros at 12:58 p.m. in Paris trading.

The utility is building its 59th reactor in Flamanville, Normandy, which will be the country's first EPR, a new generation model developed by Areva SA, the world's biggest maker of nuclear reactors. In addition to expansion in the U.S. through Constellation, the French utility has a project for two reactors in the southern Chinese province of Guangdong and is aiming to operate plants in South Africa and the U.K.

U.S. Reactors

Electricite de France said last month it got board approval to raise its stake in Constellation to 9.9 percent. The French company doesn't have board room representation, spokeswoman Carole Trivi said by telephone today.

A company is subject to heightened reporting requirements and investment limits under federal regulations if it owns at least 10 percent of a U.S. electric utility.

The U.S. has 104 working reactors, almost twice as many as France. The U.S. Nuclear Regulatory Commission expects to receive as many as 34 reactor applications by 2010 as companies seek to capitalize on rising power demand without increasing so- called greenhouse gas emissions. These would be the first new nuclear facilities since the partial meltdown in 1979 at Three Mile Island in Pennsylvania.

Electricite de France and Constellation last year created a 50-50 joint venture called Unistar Nuclear Energy LLC to develop new nuclear installations in the U.S. These may include as many as four EPRs at Constellation's Calvert Cliffs plant in southern Maryland, Nine Mile Point Nuclear Station and R.E. Ginna Nuclear Plant in New York, the companies said last year.

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net