France plans to pay €9.7 billion to fully renationalize EDF, the country’s state-backed electricity giant.
France plans to pay €9.7 billion to fully renationalize EDF, the country’s state-backed electricity giant. The government has stated that doing so will allow it to bolster the country’s energy independence, overhaul its nuclear power program and invest in renewables.
The French Finance Ministry said that it will offer EDF shareholders €12 per share for the roughly 14% of the company’s stock that the government doesn’t already own. That price is more than 50% 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 will 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% 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% 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.