Areva - Reference Document 2016

INFORMATION ABOUT THE ISSUER

5.1 History and development of the issuer

5.1.5.

IMPORTANT EVENTS IN THE DEVELOPMENT OF THE ISSUER’S BUSINESS

Two major nuclear energy industry companies majority-held directly and indirectly

by CEA-Industrie were combined to form AREVA on September 3, 2001:

Cogema (Compagnie générale des matières nucléaires), established in 1976 to

acquire themajority of CEA’s production department operations: mining, uranium

enrichment and used fuel treatment; and

Framatome, established in 1958, one of the world’s leading companies in the

design and construction of nuclear reactors, in nuclear fuel and in the supply of

services relating to those operations. In 2001, Framatome established Framatome

ANP as a joint company of AREVA (66% interest until March 2011) and Siemens

(34% interest until March 2011), thus merging the nuclear operations of those

two groups.

AREVA was thus formed from the corporate structure of CEA Industries. It kept the

Euronext Paris SA listing of 4% of its share capital.

Cogema and Framatome took the trade names AREVANC and AREVANP in 2006.

Several findings were brought forward in 2015:

AREVA no longer has a sufficient capital base to carry the risk of a new reactor

construction project alone across the full scope of a power plant;

the competitiveness of the group’s products in the new builds market must be

reinforced;

there are overlapping areas of expertise between AREVA NP and EDF for the

nuclear island, although AREVA NP still has its own areas of expertise which

may be offered to its entire international customer base on a long-term basis;

AREVA NP has a variable level of risk management available to it for the different

design and construction work packages of a power plant construction or

modernization project. As project manager and operator of complete power

plants, EDF has skills that are synergistic with those of AREVA NP for the

management of some of those risks, opening up the opportunity for a business

combination between them.

These points confirmed that AREVA NP should refocus its scope of responsibility

on new build projects in its core business: the primary cooling system and the

instrumentation and control system.

In 2016, to restore its competitiveness and stabilize its financial situation, the group

designed and has started to implement a restructuring plan, consistent with the

“2016-2020 roadmap” presented to the market on June 15, 2016.

The principal components of the group’s restructuring plan are:

subsidiarization of the nuclear fuel cycle operations within New AREVA Holding

(“NewCo”), a wholly owned subsidiary of AREVA;

subsidiarization of the operations in the AREVANP consolidation scope (including

the design and supply of nuclear reactors and equipment, fuel assemblies and

services to the installed base) within a subsidiary wholly owned by AREVA NP

(“New NP”), whose sale to EDF and third-party investors is scheduled for 2017;

capital increases for AREVA and NewCo in the total amount of approximately

5 billion euros; and

asset disposals to withdraw from certain operations.

Since July 1, 2016, as part of the restructuring plan, the group was reorganized

into two separate managerial scopes, NewCo and AREVA NP:

NewCo combines all of the operations of the nuclear fuel cycle. It conducts its

operations in mining, uranium chemistry and enrichment, used fuel treatment

and recycling, logistics, dismantling and nuclear waste management;

AREVA NP’s operations must be sold to EDF according to the memorandum of

understanding signed on July 28, 2016. The contract signed on November 15,

2016 between AREVA and EDF sets the terms for the sale in 2017 of an interest

giving EDF exclusive control of an entity (“New NP”) which is a wholly owned

subsidiary of AREVA NP, and which will combine the industrial operations of the

design and supply of nuclear reactors and equipment, of fuel assemblies and

of services to the installed base of the AREVA group. The OL3 contract and the

means needed for its completion together with the Component contracts affected

by serious anomalies which might have been identified as part of the quality

audit in progress are not included in this sale. In addition, the two companies

are contemplating combining their engineering resources in the field of the

design and construction of new nuclear islands and their related operational

instrumentation and control systems for projects in France and abroad via the

plan to create a joint company, NICE, in which EDF would hold 80% and New

NP 20%.

Through its subsidiary AREVA TA, the Group also supplies services for the design,

construction and maintenance of nuclear marine propulsion reactors and nuclear

research facilities. It is also involved in the renewable energies sector, particularly

in the fields of bioenergy and energy storage. Nevertheless, in line with its objective

of refocusing on the nuclear fuel cycle operations, most of these operations are

scheduled to be sold or shut down.

At the end of the implementation of the restructuring plan, AREVA’s main mission

will be to complete the Olkiluoto 3 EPR reactor project (“OL3”) in Finland with the

necessary resources, in compliance with its contractual obligations. Another of

AREVA’s goals will be to support the asset disposal process in progress, to close

out the remaining renewable projects, and to carry certain contracts relating to

forgings in the Creusot plant, and to reimburse bank borrowings (bilateral lines of

credit and RCF) in 2017 and 2018.

IMPORTANT EVENTS IN THE DEVELOPMENT OF THE ISSUER’S

BUSINESS

For earlier main events, please refer to previous AREVA Reference Documents.

2013-2015

On January 18, 2013, AREVA signed a five-year syndicated line of credit agreement

with 19 banks for 1.25 billion euros to replace the previous undrawn syndicated

line of credit, which expired in 2014.

On June 2, 2013, AREVA launched the first employee shareholding program since

the company was established; following this transaction, 36% of the employees in

France, the United States and Germany held approximately 1.2% of the group’s

share capital at December 31, 2013.

2016 AREVA

REFERENCE DOCUMENT