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HOMENews ReleaseFormal Agreements Reached with French Utility (EDF) and the AREVA Group toward Investment in New NP of France

Press Information

July 31, 2017 No.2072

Formal Agreements Reached with French Utility (EDF) and the AREVA Group toward Investment in New NP of France

Tokyo, July 31, 2017 - Mitsubishi Heavy Industries, Ltd. (MHI) has taken a formal decision to invest in New NP, a new company to be launched as an affiliate of Electricité de France (EDF), a leading French utility, in conjunction with reorganization of France's AREVA Group, all-round specialists in nuclear energy. Agreements on the investment have been concluded with both EDF and the AREVA Group.

MHI will acquire a 19.5 percent equity stake in New NP. The move will expand ties between MHI and EDF, the world's largest operator of nuclear power plants (NPPs) benefiting from a broad experience in project development and international cooperation on the basis of the EDF group's integrated organization, engineering skills and lessons learned, and with New NP, designer and manufacturer of nuclear equipments, products (including fuel) and systems. It is aimed at establishing a global structure for the provision of the most sophisticated nuclear power generation technologies that excel in both safety and reliability.

Since September 2015 MHI had been mulling investment into AREVA NP, a company in the AREVA Group that has long undertaken the design and manufacture of equipment for NPPs, as well as actual plant construction and fuel supply. However, in the framework of the reorganization of the AREVA Group, AREVA NP will now become an EDF affiliate under a temporary new name: New NP. In its new position, New NP will specialize in profit-making after-sale servicing and fuel supply for existing NPPs, as well as engineering and equipment manufacturing of nuclear reactor. MHI has thus taken the formal decision to invest in the newly launching New NP.

In taking the investment decision, MHI President and CEO Shunichi Miyanaga offered the following comment: "For many years MHI has been a key player in cooperation between Japan and France in the development of nuclear power generation technologies, and we have high hopes and expectations that this new structure will deepen and expand our ties of cooperation. With this new initiative, we will strive all the more vigorously to further improve technologies to ensure the safety and reliability of nuclear energy and to foster nuclear energy's widespread adoption in the global market as a leading choice that can resolve the globally shared issues of reducing greenhouse gas emissions and achieving stable supplies of energy."

Cooperation between MHI and the AREVA Group began in the 1990s through collaboration in the fuel cycle business. In 2006 the two parties concluded an agreement of more broad-based cooperation in the nuclear energy field, after which the joint venture (JV) ATMEA was established through a fifty-fifty investment with the partner currently known as AREVA NP. Through integration of the two companies' technologies, the JV proceeded to develop the "ATMEA1," a pressurized water reactor (PWR) in the 1200 megawatt (MW) class providing the world's highest levels of safety, reliability and seismic capacity. Marketing of the ATMEA1 is currently underway in Turkey and other countries worldwide, especially emerging economies, where new NPP construction plans are going forward.

EDF is the world's largest provider of nuclear energy, currently operating a total of 73 NPPs in France and the UK. To date MHI has received orders for 15 replacement steam generators for EDF's plants, and today close, strong ties of cooperation continue to be forged between the two companies. In June 2016 a memorandum of understanding (MOU) was concluded toward MHI and EDF's cooperation in the nuclear energy field; it calls for EDF's marketing, technological and other support of ATMEA's business, plus broad-based cooperation in the global markets making use of the two companies' technological capabilities and specialized strengths.

MHI's investment into New NP was decided with intent to strengthen the ties between Japan and France in the nuclear power industry based on these close relationships of cooperation with the AREVA Group and EDF.

MHI will continue to coordinate with EDF and the AREVA Group toward the closing of the transaction. All procedures are slated to be completed at the end of the current calendar year.

In another move involving the AREVA Group, MHI is also scheduled to acquire a 5 percent equity stake in New AREVA Holding (formerly referred to as "NewCo"), a company conducting business primarily in fuel cycle. In this case also, all procedures will continue to go forward toward targeted completion at year end.
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