Nuclear Draws Borders With Siemens Sale of Areva Stake

(MoneyWatch)  One of today's top news items in the energy sector is German conglomerate Siemens' sale of its shares in French nuclear firm Areva. The stake amounted to about a third of Areva's shares, valued at $2-3 billion.

The sale of shares back to Areva doesn't appear to be directly related to the recession, and has up to three years to be completed. It looks like neither firm will be particularly affected by the transaction. So what gives? Mainly, a drawing of borders in terms of which nations want nuclear.

France has always been pro-nuclear, and currently has 59 plants that provide almost 90 percent of the country's energy. Older reports suggest the country's president, Nicholas Sarkozy, wants to combine Areva with Alstom and Buoygues, two more large French outfits.

However, Areva's operations after the split may well stop at the border to the north; Germany's citizens have come down firmly on the side of renewables, and against nuclear. The company could be left in a stronger position, but with a differently-shaped market to reach out to, primarily to the west, in the United Kingdom and United States, but also to China and a few other countries.

Meanwhile, Siemens appears to be planning to move eastward to join with a Russian company, Atomenergoprom. Although Siemens' nuclear division wouldn't directly compete with Areva today, that situation could change in the future. It's likely that Areva, aside from being jammed together with a couple of French compatriots by Sarkozy, will need to hold out its hand to the markets to come up with new investment cash -- and at less than a favorable time for doing so.