French utility EDF has renegotiated a deal for the purchase of GE’s nuclear turbine maker at a reduced price amid risks of being hit by European sanctions against Russia, writes The Financial Times.

The French government urged state-controlled EDF to make a bid for General Electric’s nuclear turbine unit as part of a deal presented by French President Emmanuel Macron earlier this year.

The acquisition harmonizes with EDF’s plans to build new reactors and secures the future of a large factory located in eastern France at a time when GE was exploring options for divesting assets and cutting jobs.

However, there is a risk that the deal will be hampered by European sanctions levied against Russia given that the GE unit is a supplier to Russian nuclear agency Rosatom. The organization supplies large parts of Europe with nuclear fuel, including Bulgaria and Hungary, and this dependency could potentially protect the sector from European sanctions, according to a person familiar with the deal.

”Europeans would have to buy really extra thick sweaters for this winter if they went down that route,” the person said.

The deal would ensure EDF access to the 80 meter steam turbine Arabelle, for which Turkey and Egypt have entered construction contracts, and overseas projects with participation from Western companies have been permitted to continue.

EDF expects to close the deal soon as part of a transaction that will shave 10-20% off the enterprise value, originally set to USD 200m. Moreover, EDF is prepared to investing EUR 800m in the project, according to several person familiar with the negotiations.

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