Areva shares ramp on steel move

19 June 2006

French nuclear technology company Areva has opened acquisition discussions with France Essor to discuss the feasibility of buying steel group Sfarsteel, which manufactures forged components such as the shells and tubes of steam generators, reactor vessels, turbines rotors, primary coolant circuit pipes and other items for nuclear power stations.

The move has heightened speculation that a swathe of new reactor orders are set to come in over the coming years, putting pressure on manufacturers to supply specialist components.

In a statement, Areva said: “At a time when the nuclear industry is experiencing a global renaissance, Areva is eager to strengthen the security of its supplies, particularly forged components.”

Sfarsteel adds: “The renaissance of nuclear and the construction of numerous new refineries require a supply of heavy forged components. Investments in 2006 amounted to €30 million, which will allow us to increase our production capacity by 30% by the end of 2007. We will then be in a position to meet the expectations of the market, both in terms of capacity and technology.”

Sfarsteel, a wholly-owned subsidiary of France Essor, has four production units located in the Le Creusot basin in central France. Commercial terms or a desired timeframe have not been disclosed.

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