The French State has announced its intention to fully renationalise French energy and utility company EDF, making a €9.7 billion bid for a 100% share in the company.
As a result of the ambitious takeover bid, shares of EDF on the Paris Stock Exchange rose by 15% to €11.79 per share. The government takeover would give France control over Europe’s largest nuclear power operator. The French Ministry of Finance is planning to offer €12 per share, a 53% premium over the closing price of the utility company’s shares on 5 July, the day before the government first proposed the nationalisation of the company.
The utility company was first listed on the stock exchange 17 years ago. Under the French government of Édouard Phillippe in 2017-2020, there had been plans to fully privatise the company under the Hercules Project but these were abandoned last year. With French President Emmanuel Macron securing a new tenure this year, the government is now taking a change of course with regard to EDF.
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EDF is currently 84% owned by the French State, 15% by shareholders, and 1% by the company’s workers. The utility company has struggled financially for several years and incurred severe debts. In February, the French Government offered $2.4 billion in financial support for the company which had its profit hit significantly by power price caps and nuclear outages.
Against the backdrop of Russia’s invasion of Ukraine, which has sent energy prices skyrocketing across Europe, the acquisition of the remaining shares by the government will allow the French Government to speed up decision-making and open new routes of funding and direct intervention in the field of energy.
It is hoped that EDF will soon restart some of its nuclear power plants and begin new construction projects.
