France Will Make Decision Soon on Best Partners for Areva

By Tara Patel

Feb. 6 (Bloomberg) -- The French government will make a decision soon on the “most profitable” partners for Areva SA after Siemens AG announced it was pulling out of a joint venture with the world’s biggest maker of nuclear reactors.

“I want the state to think about which industrial partners would be the most profitable for Areva,” French President Nicolas Sarkozy said in a speech during a visit to Flamanville, Normandy, where the company is helping to build a new-generation reactor. “It should be finished soon because it is necessary.”

Areva, which is controlled by the government, has turned to the state for financial support to fund investment as the credit crisis hampers efforts to raise capital. Siemens, Europe’s biggest engineering company, said last week it plans to sell its 34 percent stake in a nuclear joint venture with Areva.

Nuclear “renewal is powerful and it would be a grave error to be late with investment,” Sarkozy said. “The positions are to be taken now and Areva’s customers won’t understand if they have to wait because investment in production didn’t follow.”

“We must invest without hesitating and without regret, quickly and massively and in France,” he said.

The Paris-based company is supplying the reactor parts for the construction of France’s first Areva-designed Evolutionary Power Reactor in Flamanville. Sarkozy announced last week another would be built in Penly, also in northern France, and today raised the possibility of a third.

Areva signed a preliminary sales agreement earlier this week with Nuclear Power Corp. of India for two reactors with a capacity of 1,650-megawatts each. The Indian state-run monopoly may buy as many as six reactors from Areva.

The Siemens stake sale reignited speculation about a restructuring of French nuclear assets that could include a tie- up with Alstom SA, a turbine maker from France. Alstom has pushed for a merger with Areva to boost growth, while Areva Chief Executive Officer Anne Lauvergeon opposes such a step.

Both Lauvergeon and Alstom Chief Executive Officer Patrick Kron accompanied Sarkozy during today’s visit.

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