A multibillion-euro rescue package that Areva has struck with EDF will transform the two French nuclear companies’ strained relations, according to one of the senior figures involved in the negotiations.

“The deal will force a close co-operation, I am sure of this,” says Philippe Varin, the chairman of Areva who is also an EDF board member, in a Financial Times interview.

Areva, once the pride of France’s nuclear industry, last year reported a record €4.8bn net loss as the reactor designer and constructor reeled from a series of problems. These included the downturn in the nuclear industry following the 2011 Fukushima disaster, and acute difficulties with certain Areva projects — led by one in Finland.

But the company has also suffered because of its longstanding rivalry with EDF, the French utility that operates the country’s nuclear power stations, and also builds reactors. The two state-controlled companies have squabbled over key contracts.

The rescue package unveiled last week will see EDF pay €2bn for a 75 per cent stake in Areva’s lossmaking reactor business, Areva NP. It will mean that EDF will assume the lead role in designing, manufacturing and servicing reactors.

Mr Varin, a former chief executive of PSA Peugeot Citroën, describes Areva NP as a “pretty tough turnround story”, but adds: “EDF will now have an interest in having Areva NP be as successful as possible.”

The rump Areva group will be reduced to a nuclear fuel company that mines, enriches and then disposes of uranium.

Importantly, Areva agreed long-term contracts to provide fuel and other services to EDF as part of the rescue package.

Mr Varin says the new Areva, stripped of Areva NP, will have a “sound business footing” due to the EDF contracts. These deals alone should generate about 40 per cent of the company’s revenue, he adds.

This is a welcome development for Areva. About 10 years ago, EDF, amid strained relations with Areva, began to source more of its uranium services from abroad.

But the damage done by infighting between EDF and Areva was most notable in bids to build nuclear power plants. For example, in 2009 petty discord between the two companies was blamed for neither winning a reactor contract in Abu Dhabi. Instead, it went to a market newcomer.

Some analysts are sceptical that Areva and EDF can consign their strained relations to the past with the new rescue package.

“There is a long history of rivalry between EDF and Areva,” says one analyst, who declines to be identified. “It has already been getting a little better in recent years, but this deal will not immediately fix the problem.”

But Mr Varin says that in working together, Areva and EDF will be a stronger force, adding that having reactor construction and project management under one roof will be a better pitch to customers.

“There is huge potential for us both in the Middle East, Latin America and Asia — French nuclear has a great reputation, we just need to sell it,” he says.

International sales are important for Areva and EDF, but also strategically for France. Over the next 20 to 30 years the country will need to start replacing its ageing fleet of 58 reactors, which supply 75 per cent of France’s electricity.

This will require a healthy nuclear industry that has retained the complex know-how of building new reactors.

Areva, however, has not sold a new reactor since 2007, and has been buckling under the costs of mismanaged projects — notably in Finland where the company’s Olkiluoto 3 plant is 10 years behind schedule.

Mr Varin says an agreement has yet to be reached between Areva, EDF and the government on who will bear the risk for any further problems with the Finnish plant.

Beyond closer working on nuclear projects, there is a strong financial logic to collaboration between Areva and EDF.

Areva needs a €7bn capital injection over the next two years, and EDF’s €2bn payment for the controlling stake in Areva NP will therefore form a substantial part of this funding. There is also likely to be a government-backed capital raising for Areva.

But Mr Varin stresses the rescue package is no “silver bullet”, and has to go alongside a restructuring plan for Areva that will see up to 6,000 jobs removed.

Speaking of the negotiations between Areva and EDF, Mr Varin admits there were some “tensions”, notably over Areva NP. “When you only have one buyer and seller it is very difficult to find the right price,” he says.

There were also some small ironies. The French finance ministry gave the deal the code name écrin, which means a little jewellery case.

Mr Varin jokes that the word écrin is also the name given at Areva to a training exercise for a nuclear crisis on one of their sites. “It’s a funny coincidence,” he says.