French government launches public takeover bid to fully control EDF

The government will submit the application for tender to the Financial Markets Authority (AMF) in early September. [Alexandros Michailidis / Shutterstock]

The nationalisation of French energy giant EDF is close to completion after the government announced the launch of a public takeover bid to purchase the remaining 16% share of the company on Tuesday (19 July).

Read the original French article here.

The French government announced on 6 July that it would be nationalising the French energy giant, Electricité de France (EDF).

On Tuesday, the government, which already holds 84% of the energy company, announced it would launch a public tender offer to fully take over the company, submitting the application to the Financial Markets Authority (AMF) in early September.

The full takeover will make the state the “only pilot” on board, to cite the words used by Professor Jean-Michel Gauthier in a previous interview with EURACTIV.

Nationalisation of EDF seen as 'inevitable' to carry out France's nuclear plans

The nationalisation of French energy giant EDF was “inevitable” because of the “huge amount of regulatory and economic constraints” put on the company as well as France’s new ambitious nuclear programme, according to Professor Jean-Michel Gauthier.

New nuclear programme

The government has announced that it plans to spend €50 billion by 2030 to extend the lives of existing nuclear reactors, dovetailing with President Emmanuel Macron’s plans to build six new reactors by 2035 at an estimated cost of a further €50 billion.

The aim is to ensure “abundant production of carbon-free electricity” in the long-term, Energy Transition Minister Agnès Pannier-Runacher confirmed to broadcaster Europe 1 on Tuesday morning.

It is above all “the geopolitical situation [that] requires strong decisions to ensure France’s independence and energy sovereignty”, the economy ministry insisted in the opening words of its press release announcing the public takeover bid.

At the same time as France’s nuclear fleet has been plagued with maintenance and corrosion problems, recent heat waves have also forced some reactors to shut down, due to the risk of operations overheating waterways.

However, France’s nuclear safety body (ASN) greenlighted EDF’s request on 13 July to keep four reactors running despite their effect on waterways. Such a “temporary derogation” had become “essential for the safety of the electricity network”, the French agency said.

Fearing EU conditions

However, unions and politicians from the opposition have questioned whether the EU electricity market, currently defined by the “marginal” cost of the most expensive last MWh produced – which is now gas – would impact EDF’s nationalisation in the long term.

Sébastian Jumel, Communist MP and member of the economic committee in charge of the “purchasing power” bill, is amongst those questioning the conditions the EU will impose on EDF’s nationalisation.

Jumel called for “an energy exception […] on electricity production to get it out of the market logic” at the press conference that followed the government’s announcement on Tuesday.  Contacted by EURACTIV, Jumel said he will set up an “inter-parliamentary and trade union group” on such issues.

He also called the government’s move “a deception that secretly prepares the return of a carve-up of our public company.”

These sentiments were echoed by far-right Rassemblement National leader Marine Le Pen.

The Hercules project, which would involve splitting the company’s nuclear assets from its other activities, notably in renewable energies, will “come back on the table”, Le Pen told broadcaster BFM TV on 10 July.

Unions put EU electricity reform at centre of EDF nationalisation talks

French energy unions have called for safeguarding the finances of energy giant EDF as it undergoes nationalisation, a move they say is only possible with a rethink of the EU’s electricity market.

Government ‘cynicism’

Le Pen took to Twitter to denounce the “cynicism” of a government that “dares to waste €10 billion to facilitate the dismantling of EDF.”

“It is an extremely costly operation that has no national interest purpose,” said Jean-Philippe Tanguy, Rassemblement National deputy for the Somme, in comments to EURACTIV, adding that the operation “made the stock jump without any precaution”, he added.

The price of EDF’s shares have risen by more than 30% since the government’s announcement on 6 July – though EDF requested to have the price put on hold on 13 July to prevent it from spiralling out of control.

One of Economy Minister Bruno Le Maire’s proposals is to implement a buyback of shares for €12 per share, which is more than the current price; €12 per share would represent a 53% premium on what the share price was the day before Prime Minister Elisabeth Borne announced the nationalisation of EDF on 6 July.

The government “is not going to try to bring the price down,” Tanguy said.

French move to nationalise EDF reopens restructuring debate

Prime Minister Elisabeth Borne’s announcement to nationalise French energy giant EDF in the wake of the European Parliament approving nuclear and gas in the EU’s green taxonomy, has revived the debate on how to restructure the French giant.

[Edited by Daniel Eck/Nathalie Weatherald]

Davide Basso contributed to reporting.

 

 

 

 

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