This should be Areva's time in the sun. As nations search for clean, renewable energy sources and consumers worry about volatile oil prices, nuclear power is hot again. Over the next decade, the world is expected to build 180 nuclear plants, up from just 39 between 1999 and today. The state-owned French giant is scrambling, though, not just to rectify a series of snafus at a high-profile reactor it's building in Finland, but also to raise more than $10 billion in new capital and weather the loss of an important industrial partner.
All that has raised concerns that CEO Anne Lauvergeon--who fused a disparate collection of firms into the first one-stop nuclear shop, earning the nickname Atomic Anne along the way--has dangerously overreached. Areva currently retains a handy lead over rivals, and that is in no small measure due to Lauvergeon's leadership. But rivals from Toshiba to Russia's Rosatom are sensing an opportunity as the market continues to grow.
Areva was created in 2001 when Lauvergeon combined state-owned uranium-mining and fuel-recycling company Cogema with nationalized reactor builder Framatome. It is still the source for any item in the nuclear buffet: supplying enriched uranium, building and managing plants, disposing of nuclear waste. The Paris-based firm operates in more than 100 countries and employs some 75,000 people. Its order book boasts an impressive $67.5 billion backlog, the best in the business.
That the industry's 800-pound gorilla is French is one of those unexpected outcomes for a state-planned and -owned enterprise. In the 1970s, when most Western nations reacted to the first oil crisis by forgetting it ever happened, France decided to kick its petroleum habit by pouring money into its young nuclear industry. France now has 59 operational reactors, which generate 80% of the country's electricity.
Areva's rise was built on that national commitment, but the company has also benefited from the ambitions of Lauvergeon, who, as a member of France's civil service élite, first gained public attention as Socialist President François Mitterrand's sherpa of summits during the 1980s. After taking control of the key state-owned nuclear companies, she merged them to create Areva eight years ago. "Anne Lauvergeon had the drive, creativity and vision to assemble all these parts into a single unit to be ready for a nuclear renaissance that she saw coming," says Ben Elias, a research analyst for Sterne, Agee & Leach in New York City. "There are very few CEOs in her league."
On paper, at least, Areva is perfectly positioned for the nascent boom. In addition to the 47 new plants under construction worldwide, 133 are planned for the next decade. Industry analysts predict a further 200 new reactors between now and 2050. With reactors at about $7 billion a pop, the payday for the biggest players--Areva, Rosatom, Toshiba-owned Westinghouse, Mitsubishi Nuclear Energy Systems and a General Electric--Hitachi joint venture--promises to be huge. A reactor under construction in Tennessee is the first of at least a dozen planned in the U.S. Italy has just reversed a 22-year-old building freeze, and Britain plans at least four new nuclear reactors.