France $10 Billion Renationalizes Electricity Company

France Will Spend Nearly $10 Billion to Renationalize Electricity Company

https://www.nytimes.com/2022/07/19/business/france-edf-buyout.html?

By Jason Karaian;  July 19, 2022

The government offered to buy the shares it doesn’t already own in EDF, which operates all of the country’s nuclear plants, in the face of a worsening energy crisis after Russia’s invasion of Ukraine.

 

An EDF nuclear power plant in Belleville-sur-Loire, France.Credit...Benoit Tessier/Reuters

France plans to pay 9.7 billion euros, about $9.8 billion, to fully renationalize EDF, the state-backed electricity giant, in a move that the government said would allow it to bolster the country’s energy independence, overhaul its nuclear power program and invest in renewables.

The French Finance Ministry said on Tuesday that it would offer EDF shareholders €12 per share for the roughly 14 percent of the company’s stock that the government doesn’t already own. That price is more than 50 percent higher than what shares were trading at just over two weeks ago when Élisabeth Borne, the prime minister, announced the renationalization plan.

EDF’s shares, which had been suspended pending details of the offer, rose 15 percent when they reopened for trading in Paris on Tuesday. The Finance Ministry said that it planned to file the offer with the market regulator by early September.

The move would give the government more control to fix problems that have plagued France’s nuclear power program, the biggest in Europe, and comes after President Emmanuel Macron pledged to shield consumers from soaring prices as the continent faces a worsening energy crisis from Russia’s war in Ukraine.

 

Though France gets about 70 percent of its electricity from nuclear power, Ms. Borne noted that it could no longer count on Russian oil and gas. The government must ensure its energy sovereignty by holding 100 percent of the capital in EDF, she said. The company, which has €43 billion in debt, is France’s main electricity producer and operates all of its nuclear plants.

Around half of France’s atomic fleet has been taken offline as a series of unexpected problems has hit EDF, including corrosion inside plants and a hotter climate that makes it harder to cool aging reactors. The outages have caused the country’s nuclear power output to tumble to its lowest level in nearly 30 years, pushing electricity bills to record highs just as the war in Ukraine is stoking broader inflation.

Liz Alderman, Constant Méheut and Aurelien Breeden contributed reporting.

Jason Karaian is the editor of DealBook, based in London. He joined The Times in 2020 from Quartz, where he was senior Europe correspondent and later global finance and economics editor. @jkaraian