French authorities are reportedly brainstorming ways to prevent nuclear reactor equipment and parts supplier Velan SAS from being bought out by US interests.
The company supplies valves and services for Electricity de France SA, the French state-owned electric utility giant operating 56 nuclear reactors at 18 sites across France, and which has additional electricity generation capacity in countries across Europe, North and South America, Asia, Africa and the Middle East.
Velan SAS is a French subsidiary of Quebec, Canada-headquartered industrial valve manufacturing company Velan, Inc., and has fallen into the crosshairs of Flowserve Corp, a Texas headquartered multinational specializing in pumps, valves, mechanical seals, automation and services for the oil, gas, and chemical industries. Flowserve is looking to purchase Velan SAS for $247 million.
However, France wants to prevent the business from falling into the American company’s hands, and has already secured an exemption from sale for Segault SAS, which is owned by Velan SAS, and which provides components for France’s fleet of ballistic missile submarines – the main arm of the nation’s nuclear deterrent. An agreement to ensure the subsidiary stays in French hands has already been lined up, with funding in place to purchase Segault SAS.
Sources speaking to US business media said Paris now wants to make similar arrangements with the rest of Velan SAS, with options including an outright block of its purchase by Flowserve, or restrictions, the nature of which has not been specified.
“If the US gains control over a maker of equipment for Electricity de France, they could be able to prevent the export of French nuclear reactors to China,” French Senator Marie-Noelle Lienemann said of the US company’s takeover bid. “It’s not just defense industries that are strategic –the nuclear industry is key for France’s economic recovery and its transition,” the lawmaker said.
With major European economies like Germany falling on hard times and facing the unenviable prospect of deindustrialization following a shortsighted decision to dramatically scale back imports of Russian oil and gas to try and “punish” Russia for its special military operation in Ukraine, France has managed to avoid sinking into a recession (although it also faces near zero growth) thanks in large part to its nuclear power plants.
However, having no uranium mines of its own, Paris is forced to rely on imports to fuel its nuclear plant network, receiving up to 17 percent of its uranium from Niger (which recently saw a military takeover and froze exports), 18 percent each from Russia and Kazakhstan, respectively, 21 percent from Canada, 16 percent from Australia and 10 percent from Namibia. That leaves France vulnerable, both to external geopolitical factors beyond its ability to control, and to the consequences of the economic and security policy of its US and NATO allies.
French President Emmanuel Macron announced a 20 billion euro “green tax credit” subsidy package in May, in response to last year’s push by the Biden administration to scoop up European manufacturers, particularly energy-intensive industries, by offering tens of billions of dollars in subsidies to relocate to the US as part of the so-called Inflation Reduction Act.