Comments by the French energy minister have led to a 4.2 per cent drop in shares for EDF.

Segolene Royal refused to rule out a merger between the company and struggling nuclear reactor maker Areva.

Ms Royal responded to a question on BMFTV about a merger, by saying: “All options are on the table. All scenarios are being looked at in terms of the national interest. The national interest is to create champions in the energy sector.”
Segolene Royal
Cost overruns on key projects and a lowering in demand have severely impacted on Areva.

Emmanuel Macron, France’s economy minister, said last week that the future of Areva, which has racked up €8bn in losses over four years, might include “greater industrial co-operation, or even a capital alliance” with EDF.

Since then, shares in EDF had fallen 6 per cent. Ms Royal’s morning comments on Monday, which suggested that something more than just a capital alliance was being contemplated, led to a further fall of 2.3 per cent.

Financial Times reports that any government attempts to push together two group is likely to face opposition from Jean-Bernard Levy, the chief executive of EDF, who last month said there was no question of EDF making a financial investment in Areva..

Philippe Knoche, Areva’s new chief executive, said last week that improving co-operation with EDF was a priority and talks on a capital alliance would take place “at a later stage”.

People close to the discussions say that a deal is unlikely to be worked out before the summer, and that a full merger is not the most likely option.