New | Chinese firms eye troubled French nuclear technology major Areva

Potential investment by the mainland's nuclear power firms in nuclear technology major Areva would help shore up the French firm's finances, while opening the door for possible access to French proprietary reactor design technology.

If an investment-for-technology deal was struck, it could bolster the Chinese companies' credibility when selling mainland-made reactors overseas, but it might expose them to Areva's steep losses, analysts said.

"What the Chinese want most is access to knowledge in third-generation reactor design and construction that the French have not transferred to China," Sanford C. Bernstein senior analyst Jay Huang told the South China Morning Post. "In contrast, the United States' Westinghouse has passed on its third-generation technology to China."

Mainland firms would also be keen to buy into Areva's lucrative reactor maintenance business, he added.

Westinghouse in mid-2007 signed a US$8 billion deal to sell four reactors to state-owned nuclear power operators China National Nuclear Corp (CNNC). Areva sealed a few months later an €8 billion contract to build two reactors for CNNC's rival China General Nuclear Power Group (CGN).

Areva has attracted the interest of CNNC, CGN and power generation equipment maker Dongfang Electric to consider buying a stake of less than 10 per cent in Areva and form joint ventures, French newspaper Le Journal du Dimanche reported on Sunday, without citing anyone.

Dongfang was eyeing possibilities to form joint ventures with Areva involving its plants manufacturing nuclear materials tanks and generators, it added.