France sold a 1.5billion euro ($2billion) stake in GDF Suez, the country’s largest natural-gas distributor, as it seeks cash to buy a holding in Alstom.
The state offloaded 3.1%, trimming its holding to 33.6%, Finance Minister Michel Sapin and Economic Minister Arnaud Montebourg said in a joint statement.
The shares were priced at 20.18 euros, the bottom of a proposed range, according to two people with knowledge of the sale who asked not to be identified because the information is private.
France has proposed to buy as much as a fifth of Alstom from Bouygues as part of a $17billion deal for General Electric (GE) to buy Alstom’s gas-turbine unit.
Alstom and GE plan steam-turbine, renewable-energy and power-grid ventures.
“The sale is part of a policy to actively manage the state’s holdings,” the ministers said. Proceeds may be used in areas of economic growth, while safeguarding state “strategic interests,” and to help reduce government debt.
Ministers yesterday said the government had the option to sell as much 3.6% of GDF, cutting its holdings below a previously required threshold of a third.
A change in the law will replace that obligation with one requiring the state to have one third of voting rights in the utility, they said.
France has 2billion euros from sales of holdings in Safran, a maker of aircraft engines, and Aeroports de Paris that may also be used to buy the Alstom stake, Montebourg said. The money “has to be used either to reduce debt or reinvest and we’re reinvesting,” the minister told parliament.
Before GE announced the Alstom deal, the government passed legislation extending its ability to block foreign takeovers in energy, transportation and health care. The stake in Alstom and a venture with GE on steam turbines used for atomic reactors aim to allow the state to keep a hand in strategic energy assets.
The reduction of the government’s stake “probably reduces the likelihood of any large acquisition” by GDF, BNP Paribas Credit Research said. The government would not want to subscribe to any equity fundraising by the utility and would have “limited scope” for a stake dilution, it said.
GDF Suez’s CEO Gerard Mestrallet has clashed with the government, the company’s biggest shareholder, in the past over regulated natural gas prices for households.
The utility, which has government representatives on its board, has repeatedly taken the administration to court to obtain higher tariffs to cover the cost of supplies.
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