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. Last Updated: 07/27/2016

Areva Warns Siemens on Rosatom Venture

PARIS -- Areva on Wednesday threatened former partner Siemens with possible legal action if the German group teamed up with the French nuclear reactor maker's rival Rosatom.

Areva, which is negotiating with Siemens about the price of the German group's exit from their Areva NP nuclear reactor venture, said Siemens was breaching a noncompetition clause.

Siemens, which owns 34 percent of Areva NP and is contractually banned from competing with Areva until 2020, on Tuesday unveiled a joint venture with state nuclear company Rosatom.

"Areva points out that Siemens ... has a number of compulsory obligations under the shareholders' agreement dated Jan. 30, 2001, which in particular contains a noncompetition clause," Areva said in a statement Wednesday.

"Areva has informed Siemens that by announcing this joint venture it is in breach of contract, with all the ensuing consequences by virtue of the shareholders' agreement," said Areva, whose activities cover the full nuclear energy cycle from mining to waste.

Siemens and Rosatom, which will hold a majority stake in the venture, said they would develop Russian pressurized water-reactor technology, a new-generation nuclear reactor that will compete with Areva's 1,650-megawatt evolutionary power reactor.

They will also build new nuclear power plants and modernize existing plants, turning them into a rival of Areva, which is also competing with Westinghouse Electric, a unit of Japan's Toshiba.

In January, Siemens announced plans to exit its nuclear venture with Areva, a move Areva said had come as a surprise.

Under the terms of their shareholders' agreement, if Areva and Siemens do not come to an agreement on the price of the stake, they will ask investment banks to evaluate it, and if they still cannot agree a chartered account would be appointed.

Rosatom, a vertically integrated nuclear power giant, was set up through the privatization of all of Russia's civilian nuclear assets in 2007 as a way to confront international competition.

Russia, one of the world's biggest sellers of enrichment services, has been trying to break into the lucrative nuclear markets of the United States and European Union and has been eyeing a possible alliance in the world market.

Rosatom has said it planned to acquire foreign assets and create joint ventures to expand its reach outside its Russian home market. It already has a joint venture with France's Alstom, which makes turbines for nuclear power plants.

Siemens has worked with Rosatom on several projects since the 1990s, including safety and control services for two power plants in Slovakia. They are also partnering on the Belene nuclear power plant in Bulgaria.

The German conglomerate said last year that it expected a revival in nuclear power, with an expected share of the global power market of almost 10 percent on average between 2008 and 2013, double the average share in the five years through 2007.