EDF deal to buy GE’s nuclear turbine maker probed by UK watchdog

The UK competition regulator is probing French power operator EDF’s deal to buy a nuclear turbine maker from General Electric, in a tie-up seen as strategic for France’s atomic industry.

The Competition and Markets Authority launched the investigation on Thursday following a notice from the companies about their impending merger.

The investigation comes after state-controlled EDF agreed to buy GE’s nuclear components business in February, following months of haggling over the price. The proposed acquisition was hailed as a way of recovering French control of the turbine technology as EDF geared up to build new reactors.

EDF was encouraged to buy GE’s turbine company by the French government in the run-up to the deal in 2021, owing to its important role in the nuclear industry. GE’s nuclear business also included one site in Britain.

The CMA did not comment on the issues it might be examining. But Tom Smith, competition lawyer at Geradin Partners and a former CMA director, said: “EDF is currently building the UK’s first nuclear power stations in decades, and GE’s steam turbines are found in half of the world’s nuclear power stations, so the CMA may investigate whether GE’s competitors will be excluded from possible contracts. 

“These kinds of concerns arise where either or both of the merging parties have market power at their level of the supply chain, and therefore the ability to shut out competitors and reduce competition.”

EDF, which is set to be fully-renationalised this year, is about to embark on its biggest reactor construction programme in France for decades, with six new ones planned by President Emmanuel Macron. The move was part of a push to shore up its supply chain.

No price was ever disclosed for the GE deal, although the enterprise value was less than $200mn, people familiar with the matter said, while EDF also had to put several hundred million euros of cash into the business. The deal is supposed to close in the second half of 2023.

The French government feared asset sales by GE might lead to the specialised unit — one of the only producers in the world of the 80-metre turbines used in reactors — falling into foreign hands, people close to the talks had said. Safeguarding jobs was also an issue, as the turbine factory in eastern France employs about 1,800 people.

But the transaction also came at a time of deep financial turmoil at a reluctant EDF, which has before been pushed by the state into deals to stabilise the country’s powerful atomic industry.

EDF was last year hit hard by a series of reactor outages, hurting its electricity output, and also had to foot the bill for government measures to protect consumer bills from rising prices. It posted a record net loss of €17.9bn for 2022.

The French turbine maker had long counted Russia’s Rosatom among its biggest clients. Those orders are at a standstill, although Russia’s nuclear sector was never sanctioned after the invasion of Ukraine.

The UK regulator said it would decide whether to escalate its probe to an in-depth investigation by June 8.