EDF Increases Its Constellation Stake to 9.51 Percent

By Tara Patel

Sept. 9 (Bloomberg) -- Electricite de France SA, Europe's biggest power producer, raised its stake in Constellation Energy Group Inc. to 9.51 percent by buying shares on the market.

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 state-controlled company raised its stake in Baltimore-based Constellation, the biggest U.S. power marketer, from a previous 4.97 percent.

``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 rose 24.5 cents, or 0.5 percent, to 53.75 euros at 9:26 a.m. in Paris trading.

The utility is building its 59th reactor in Flamanville, in 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.

Electricite de France said last month it got board approval to raise its stake in Constellation to 9.9 percent.

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

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.

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