EDF and US partner end nuclear row

EDF and US partner Constellation Energy have settled a row over a nuclear project that could have cost the French power group up to $2bn.

Under the deal, EDF will buy Constellation's half-share in their UniStar partnership for $140m and will also transfer its 3.5m shares in Constellation back to the company and give up its board seat.

In return, Constellation agreed not to exercise an option to sell EDF up to $2bn of non-nuclear assets.

The value of the assets was fixed in 2008 under a deal Constellation struck with EDF when the US firm was facing liquidity issues, but the value of gas and coal-fired power assets has fallen badly since 2008.

“The deal appears to be balanced. It will prevent EDF from a write-off in the US that could have amounted to some €600m (£523.9m) if Constellation had exercised the option”, a Paris-based analyst said.

Under the previous deal, EDF had agreed to buy nearly half of Constellation’s operating nuclear business and gave Constellation the option, which was set to expire at the end of the year.

EDF had threatened legal action if Constellation exercised the option.

EDF’s previous representative on Constellation’s board, Daniel Camus, who was involved in the original deal, stepped down on 21 October.

The two companies had also disagreed over Constellation’s decision earlier this month to unilaterally pull out of the federal loan guarantee process for the companies to build a new nuclear reactor at Constellation’s Calvert Cliffs plant in Maryland.

Under the new deal, EDF will be the sole owner of UniStar, which owns the Calvert Cliffs sites.