State-controlled EDF wants to acquire 51 to 75 percent of Areva NP, which designs, manufactures and services nuclear reactors and is worth about 2.5 billion euros (2.14 billion pounds).

The deal is crucial for France, which has Europe's largest network of nuclear plants, and uses EDF and Areva to spearhead its export efforts against competition from Russia's Rosatom and Japan's Hitachi Ltd.

The European Commission, which is scheduled to decide on the deal by May 29, declined to comment. EDF and Areva had no immediate comment.

The Commission, which has been examining the deal since April 18, had intense talks with EDF last week while generally positive feedback from rivals and customers also swept away initial competition concerns, the source said.

Earlier this month, the Commission asked customers and rivals what impact the deal would have on prices, innovation and quality, according to a person with knowledge of the matter.

Innovation is a key focus for regulators seeking to ensure the pipeline of key products and technologies will continue to flow after companies are snapped up by rivals.

In January the Commission approved a restructuring plan for Areva including 4.5 billion euros of state aid, saying it would make the company viable without unduly distorting competition.

(Additional reporting by Geert De Clercq in Paris; editing by Julia Fioretti, Greg Mahlich)

By Foo Yun Chee

Stocks treated in this article : E.D.F., Areva