Mitsubishi Heavy Industries Ltd. has decided to freeze negotiations on a capital alliance with French nuclear energy giant Areva SA until further notice, it was learned Tuesday.
The two companies currently have a business tie-up in nuclear power generation.
Mitsubishi originally aimed to acquire a stake of about 3 percent of capital in the French company.
However, it will now freeze the investment plan and cancel negotiations due to an unclear outlook for the nation's nuclear-related businesses in the wake of the Fukushima No. 1 nuclear power plant crisis.
The companies will maintain the business tie-up.
MHI and Areva have partnered on the development of a midsize nuclear reactor and also established a joint venture to produce nuclear fuel since 2006.
They had been negotiating over the capital alliance since 2009 in an attempt to strengthen the partnership.
Since the Fukushima crisis, however, there were increased calls from some European countries to end the dependence on nuclear power.
In France, the leading heavy electric machinery firm Alstom SA, which enjoys close ties with Areva, has lobbied Areva to reject MHI's investment on the grounds that MHI is Alstom's rival in building turbines for nuclear reactors.
Mitsubishi deemed it difficult to continue negotiating with Areva under the circumstances.
MHI and Areva have pitched to sell reactors to Jordan as that country plans its first nuclear power plant.
On Aug. 5, the Japanese government agreed at a Cabinet meeting to continue nuclear power-related exports. But Prime Minister Naoto Kan showed an intention to review the policy, tempering the government's stance against nuclear power-related exports. Such incidences may also have affected Mitsubishi-Areva negotiations.
In June, the French government--which holds a 90 percent share in Areva--ousted Areva Chief Executive Officer Anne Lauvergeon, who was supportive of the capital alliance with MHI. The decision made it unlikely negotiations will resume at an early date.
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