Mitsubishi Heavy Industries (MHI) has agreed to acquire a 19.5% stake for an undisclosed sum in a new company that will be formed through the reorganization of Areva Group.

In the framework of the reorganization of the AREVA Group, AREVA NP, a company that designs and manufactures equipment for nuclear power plants (NPPs),  will take up the temporary name of New NP and will serve as an affiliate of Electricite de France (EDF).

In November 2016, EDF had agreed to buy Areva’s nuclear reactors business, a transaction which had been approved by the European Commission recently.

According to MHI, the stake acquisition will expand its ties with EDF. It is also expected to bolster the relationship between Japan and France in the nuclear power sector based on the close ties of cooperation of MHI with the Areva Group and French utility EDF.

MHI president and CEO Shunichi Miyanaga said: “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."

New NP formation is targeted at setting up a global structure for the provision of the most advanced nuclear power generation technologies that will stand out in terms of both safety and reliability.

Through its new position, New NP will handle after-sale servicing and fuel supply for existing NPPs along with engineering and equipment manufacturing of nuclear reactors.

MHI said that it will continue to work closely with EDF and the Areva Group for the completion of the transaction. It further added that all processes regarding the same are scheduled to be done with by the year end.

In another transaction, MHI will acquire a stake of 5% New Areva Holding which primarily does business in the fuel sector.