The European Commission is looking to see if the Areva-Siemens divorce broke anti-trust laws with regard to a prenup the parties entered into that purportedly restricts competition in an illegal manner. The French-German corporate marriage between these “nuclear giants” occurred at or around 2001 and goes by the last name “Areva NP” — a joint venture of their civil nuclear technology divisions. It was a dreamy match made in match-maker heaven with Siemens having a 35% equity stake that had a book value of approximately $2 billion Euros according to UK Guardian. That was before the contentious divorce and Siemens cried foul when they had to comply with an 8 year non-compete clause that basically was getting in the way of them moving on with their lives. So they contacted the Commission and put Areva in the hot seat.
The European Commission on Wednesday opened an investigation into whether Areva  broke antitrust rules in the area of civil nuclear technology. Specifically, the European Commission has opened proceedings into non-compete clauses and other contractual restrictions. At the beginning of the last decade, Areva and Siemens combined their respective activities in the field of civil nuclear technology in a joint venture, Areva NP. [MARKETWATCH]
All these are allegations, however, and according to the Commission’s watch dog report:
“The opening of the procedure means that there is enough grounds for an investigation, but does not prejudge its final result,” the Commission, which is the European Union’s anti-trust watchdog, said in a statement.
But it should be noted that this probe comes in light of allegations by Siemens that Avera, which took over sole control of the company, did not play fair when drafting the prenup. Guess Siemens is crying unconscionability or maybe even fraud?
French daily Le Figaro reported on Wednesday that Siemens wanted the commission to probe the post-divorce ties, which prevent it from concluding a tie-up with Russian group Rosatom, slated since March 2009. [FRANCE 24.COM]
It would hardly be the first time that corporations had such a messy divorce. Didn’t we always say it’s always about the money? But for the billions Siemens would lose on account of this non-compete clause, this probe would not be happening. There is a lot at stake:
According to German daily Sueddeutsche Zeitung, Siemens estimates every new nuclear power plant built could generate some 1 billion euros in revenue. An end to the dispute would pave the way for Siemens to proceed with a nuclear joint venture set up with Russia’s Rosatom last year. Talks on details of the tie-up — which would give Siemens a 49 percent stake in the venture — have been on hold since a French court blocked the deal until mediation over the Areva NP joint venture is completed. However, analysts said it would not have a material impact on Siemens’ share price. “No matter how the whole thing ends, it will not have a significant impact on the share price. The Siemens joint venture with the Russians will be reflected as dividends because like the Areva joint venture, Siemens has the non-controlling part in the partnership,” BHP-Bank analyst Jochen Klusman said. [UK GUARDIAN]