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France's ministry of finance said on Tuesday that the state plans to launch a simplified takeover offer to buy for $10 billion all the 16% in energy giant EDF it doesn't already own.
Electricite de France (EDF) is already owned 84% by the French government, which announced earlier this month its intention to fully nationalize the energy giant. The French state currently controls 83.88 percent of EDF's share capital, with 15 percent with institutional and individual investors.
EDF has seen difficult times in recent months amid piling debts, cost overruns on major nuclear power projects in France and the UK, and issues at its nuclear power plants in France that have led to many reactors being offline for maintenance and repairs this year, at a time when France and Europe need a lot of non-Russian gas and other forms of energy in the ongoing crisis.
In the intended offer announced today, the French state is offering shareholders of the outstanding shares $12.29 (12 euro) per share, or a premium of 53% over EDF's closing price on July 5, a day before Prime Minister Elisabeth Borne announced the government's plan for full nationalization.
Shares in EDF (EPA: EDF) were suspended from trade for a week pending the announcement of the offer and jumped as much as 15% by the early afternoon in Paris today at the resumption of the trade, after the government said it intended to launch the takeover offer.
The full nationalization of EDF strengthens France's energy independence and gives EDF the necessary means to accelerate the implementation of the new nuclear program and the deployment of more renewable energy in France, Finance and Economy Minister Bruno Le Maire said in a statement.
French President Emmanuel Macron said last year that France aims to become a leader in green hydrogen production and reinvent nuclear power by building a small modular reactor by 2030 as part of a wider $30.5 billion (30 billion euro) plan to decarbonize industry and slash emissions. According to Macron, Europe's renewable energy capacity will never be enough to produce enough green hydrogen for mobility, so France's nuclear power generation will be a key enabler for green hydrogen.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.