Dave Yoder/Bloomberg NewsAn Edison plant in Cologno Monzese, Italy.
MILAN — The French utility EDF, Europe’s biggest power generator, said Tuesday it would raise its stake in the Italian energy company Edison, as it seeks to secure a bigger foothold in the country.
The deal marks the third big acquisition by a French company in Italy this year, activity that had raised nationalistic concerns despite the European Union’s single-market rules.
EDF, which is majority owned by the French government, will pay 700 million euros, or $914 million, to increase its holdings in Edison to 81 percent from just over 50 percent. EDF will acquire the new shares from a holding company controlled by the Italian regional utility, A2A.
EDF and A2A took control of Edison, Italy’s second-largest utility, in 2005 and have since disagreed on how to run the business. The two owners have been in open conflict for more than a year as they struggled to develop a strategy for the evolving natural gas market.
Although the price of natural gas has tumbled in the past few years, Edison has had to pay more than market rates because of past deals. It is locked into expensive long-term contracts with natural gas suppliers including Gazprom, the Russian monopoly exporter. Edison, which supplies 19 percent of Italy’s natural gas, lost money in the first nine months of 2011 and is expected to post a loss for the entire year.
Sebastien Bozon/Agence France-Presse — Getty ImagesHenri Proglio, right, chief of EDF, at a plant in Belfort, France.
Benoit Tessier/ReutersTechnicians maintain a nuclear plant operated by EDF in Saint-Vulbas, France.
EDF and A2A seemed to have found an accord in March. But Giulio Tremonti, the finance minister at the time under the government of Silvio Berlusconi, blocked the deal to keep Edison from falling into French control.
In July, the EDF chief executive, Henri Proglio, expressed his frustration with the negotiations, saying authorities “didn’t want it because of cheese and jewelry,’’ according to Bloomberg News. His comments referenced two other big deals this year, in which the French dairy products maker Lactalis won control of its Italian counterpart Parmalat, and LVMH Moët Hennessy Louis Vuitton, the world’s biggest maker of luxury goods, bought the Italian jeweler Bulgari.
A new Italian government may have helped seal the deal. Mario Monti, who became the country’s prime minister in November, does not have Mr. Berlusconi’s populist streak that over the past decade has often been expressed through economic policy. Mr. Monti spent five years as the European Union’s competition commissioner, and another five years before that in charge of the bloc’s internal market rules.
Although Edison is an icon in northern Italy, the deal is likely to be palatable to those who have opposed earlier agreements because a large part of Edison’s current electricity generation capacity will remain in Italian hands. A2A and an Italian partner will pay 800 million euros to buy 70 percent of another power company, Edipower, that is owned by Edison and a Swiss company.
Edipower has a generation capacity of about 7.6 gigawatts. Edison has about 12.5 gigawatts now, counting its half of Edipower’s capacity. After the EDF deal goes through, that would fall to 8.7 gigawatts.
The deal will also help bolster Edison’s balance sheet. Standard Poor’s and Fitch Ratings recently cut the company’s credit rating to almost junk status, citing concerns about the debt load of 4 billion euros and complicated ownership structure.
Thomas Piquemal, EDF’s finance director, said during a conference call that Edison’s debt would fall by 1.1 billion euros as part of the deal. He said this coupled with the now clear corporate governance should ‘‘reassure’’ the credit rating agencies.
The Italian market regulator Consob, which must review the deal, could require EDF to begin a mandatory tender offer for the 10 percent of Edison held by Carlo Tassara, the holding company of the French-Polish financier Romain Zaleski, and the 9.3 percent of the company’s shares in public hands. EDF said that if Consob set the tender price at more than 84 euro cents, or $1.10, a share, that would nullify the entire deal.
Edison shares were trading at just under 82 euro cents late Tuesday, down 1.5 percent from the close Friday.
If approved by regulators, the deal is set to close by the end of June.
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