The French State is already the owner, now, of 84% of Électricité de France (EDF), but wants absolute control of the largest European company for the production and supply of electricity. Yesterday, the Ministry of Economy and Finance finalized the details of this total nationalization. It will be through a simplified takeover bid, for an amount of 9,700 million euros.
The EDF operation was announced two weeks ago by the prime minister, Elisabeth Borne, in the presentation of her government program before the National Assembly. The costly investment is officially justified by the need to move towards maximum energy sovereignty, a requirement made even more urgent by the war in Ukraine and the sanctions against Russia.
In reality, the reasons are more complex and hide a worrying situation. EDF is a highly indebted company with management problems in recent years. Basically, the State, with taxpayers' money, is going to the rescue of a limping giant so that it can undertake the multimillion-dollar investments that the planned construction of six new state-of-the-art nuclear power plants will require in the coming decades. The final bill for the State may far exceed the cost of the takeover bid.
Due to the doubts or bad decisions of the last governments, the French atomic park is very old and the current reactors must be stopped frequently for maintenance. Still, almost 70% of the electricity produced in France is of nuclear origin.
The full renationalization of EDF comes 17 years after its partial privatization. The step is therefore a step backwards, forced by geopolitical circumstances and the challenge of climate change. The initial intention was to gradually reduce the nuclear part of the French energy mix, but global warming, increasingly alarming, as shown by the frequent heat waves, and the Ukrainian crisis have led to a paradigm shift.
The takeover bid addressed to EDF will be presented at the beginning of September to the Financial Markets Authority (AMF), as long as the National Assembly approves the rectification of the 2022 budget that is being processed, an amendment intended precisely to finance extraordinary expenses such as the which will entail acquiring all the shares of the electricity company. The State proposes 12 euros per title, which is 53% more than the price of July 5, the day before the announcement made by the Prime Minister, and 34% more than the average of the previous 12 months. So that no loose ends are left, the State will also buy the bonds with the option to be converted into shares.
Yesterday, EDF shares registered a rise of almost 15% on the Paris Stock Exchange and were already very close to the price of the bid.
