Siemens and Rosatom have followed up their recent discussions by signing a Memorandum of Understanding (MoU) on the creation of a nuclear joint venture just one month after the German firm was invited to hold talks with the Russian state-owned firm. They believe that the move will help them to capitalise on the resurgent world nuclear market. The two companies say that their proposed partnership will help them to become world leaders in the international nuclear power business.

The MoU envisages a joint venture with Rosatom holding 50 per cent plus one share. The Russian firm is the only company in the world that covers the entire nuclear value chain and the partnership potentially gives Siemens access to a wide range of business opportunities.

The proposed joint venture will initially focus on the development of Russian VVER reactor technology as well as marketing, sales, new plant construction and the upgrade and modernization of existing nuclear plants. Siemens brings to the partnership extensive knowledge of the conventional islands of nuclear power plants as well as project management experience.

“The progress made in the talks shows that we really understand each other well by virtue of our experiences in joint activities and projects,” underlined Sergey V. Kirienko, General Director of Rosatom. “In a fully fledged partnership with Siemens we want to become the world market leader in nuclear power business. I am looking forward to soon making next successful steps in our negotiations.”

The deal between the two companies is expected to be finalised in May, allowing the two companies to move forward with plans for the global nuclear market.

Siemens forecasts that by 2030, some 400 new nuclear power plants will have been built, representing a total investment of more than EUR1000 billion. The German conglomerate, which recently backed out of its nuclear joint venture with France’s Areva, believes the deal will help it to fight off competition from Westinghouse and GE.

Completion of the deal with Rosatom will pressure on Siemens and Areva to complete their split in the nuclear business, which was announced in January 2009. The two companies have, in theory, three years to complete the sale of Siemens shares in Areva NP, but competition issues may now require that this is wrapped up in months.

Siemens decided to sell its 34 per cent stake in Areva NP due to the lack of strategic influence that it had in the partnership and its desire to pursue its own growth plans for the nuclear market.