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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: John McCarthy who wrote (71664)	11/26/2007 5:49:21 AM
From: John McCarthy	Respond to of 116555

New Trend? Areva clinches $12 bln nuclear deal from China Alcatel-Lucent, Airbus unveil contracts as President Sarkozy visits China By Aude Lagorce, MarketWatch Last Update: 4:59 AM ET Nov 26, 2007Print E-mail Subscribe to RSS Disable Live Quotes LONDON (MarketWatch) -- French state nuclear engineering firm Areva on Monday said it's clinched an 8 billion-euro ($11.9 billion) deal to build two nuclear reactors for China as the fast-growing economy seeks to diversify its energy supplies. The announcement came at the start of a three-day visit of French President Nicolas Sarkozy for formal talks with Chinese counterpart Hu Jintao amid a flurry of other Chinese deals for French companies. Areva, the world's largest nuclear equipment firm, will deliver the two third-generation reactors to state-run China Guangdong Nuclear Power Group. The Chinese group will also gain access to 35% of production from Areva's uranium unit UraMin to fuel the reactors through 2026. The deal ends months of speculation that China would buy the rectors. French, American and Russian suppliers have been vying for contracts in China, which plans to build more than 30 nuclear plants by 2020 in order to decrease its reliance on imported oil. Areva Chief Executive Anne Lauvergeon said a deal of this magnitude was "unprecedented" in the history of the civilian nuclear industry. "A new era is opening in the durable and constructive nuclear energy partnership between our two countries. This partnership...is the largest international commercial contract ever won by the French nuclear industry," she said. Because the new reactor has an estimated lifetime of 60 years, an extra 40 to 50 years of fuel will be needed after the deal expires in 2026, which means Areva may be able to sign additional contracts, Dexia analysts noted on Monday. "The record 8 billion-euro deal is worth more than the eye can catch," the broker said. Sarkozy's government is considering whether to partially privatize Areva, after its planned sell-off was cancelled by predecessor Jacques Chirac in 2005. A merger of Areva with a French industrial company such as Alstom (FR:ALO: news, chart, profile) has also been speculated. China earlier this year signed an agreement for four nuclear power reactors with U.S.-based Westinghouse Electric and consortium partner Shaw Group Inc (SGR:shaw group inc com Alcatel-Lucent, Airbus also win contracts But nuclear wasn't the only sector benefiting from China's growth on Monday. In the telecommunications equipment field, Alcatel-Lucent (FR:013000: news, chart, profile) (ALU:alcatel-lucent sponsored adr ALU 7.56, +0.19, +2.6%) signed contracts worth a combined 750 million euros to expand the mobile networks of domestic operators China Mobile and China Unicom. "Alcatel-Lucent has experienced a significant year in China with an increased market share in both fixed and mobile market sectors," said Frederic Rose, president of Alcatel-Lucent's business in Europe, Middle East, Africa and Asia and president of Alcatel Shanghai Bell. Alcatel-Lucent shares rose 2% in Paris morning trading. In the aerospace sector, Airbus said it has signed contracts to sell 160 commercial passenger jets to China in a deal worth around $14.8 billion. The order includes 110 of the European company's A320s and 50 of the slightly larger A330s. Airbus and Chinese partners earlier this year signed an agreement to produce A320s in China in anticipation of large Chinese orders for the single-aisle bestseller. Airbus and its U.S. rival Boeing Co. predict China will become the world's second-biggest aircraft market after the U.S., with airlines buying 1,900 to 2,600 planes over the next two decades. Airbus is a unit of European aerospace and defense giant EADS (FR:005730: news, chart, profile) . EADS shares rose 1.8% in Paris morning trading. Aude Lagorce is a senior correspondent for MarketWatch in London. marketwatch.com