France’s Engie in Talks to Exit Nuclear Energy in Belgium

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(Bloomberg) — Engie SA is entering talks to sell its Belgian nuclear operations to the state as the French utility seeks to focus on renewables and energy networks, while Brussels doubles down on atomic power.

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Engie has signed a letter of intent setting out the framework for exclusive talks, the company said in a statement on Thursday. The potential transaction includes seven reactors, two of which are operational, and decommissioning obligations.

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The utility has long sought to exit Belgium’s nuclear industry, while the government wants to maintain atomic generation on the expectation power demand will grow. Engie reduced its exposure in recent years with the shutdown of five reactors, but has faced steep costs to dismantle and clean up the sites. 

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The two remaining plants are run in a joint venture with the state, which has sought to extend their operation and called for a rethink on reactor closures. 

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“An agreement has been reached with Engie to determine the terms and initiate the necessary studies for a full acquisition of the Belgian nuclear park,” Belgian Prime Minister Bart De Wever said in a post on X. “Pending this, all decommissioning activities are being suspended with immediate effect.”

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Engie shares fell as much as 3.9% in Paris, and were down 2.7% as of 10:19 a.m. local time. The stock is trading “ex-dividend” — without the value of its next dividend payment — which typically sends the price lower.

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‘Clear Positive’

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“We see this development as a clear positive for Engie and, if the disposal is completed, it should be another step forward in the process of de-risking Engie’s balance sheet,” JPMorgan analysts led by Javier Garrido said in a note.

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Nuclear power remains a technology that divides Europe. Germany has closed its last reactors and plans new gas-fired plants to back up renewables. France, Sweden and the UK are adding atomic stations and Italy has begun looking at reviving the sector. European Commission President Ursula von der Leyen said last month that a number of countries had made a “strategic mistake” in turning their back on the industry.

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The Belgian state and Engie aim to agree on the principal terms and conditions of a potential transaction by Oct. 1, according to the statement. De Wever and Energy Minister Mathieu Bihet will address the national parliament at 2:15 p.m. Brussels time on Thursday, according to a spokesman.

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“This initiative reflects the Belgian government’s strategic decision to assume direct ownership of the country’s nuclear assets, in line with its ambition to extend the operation of existing nuclear reactors and to develop new nuclear capacity,” the statement showed.

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Russia’s full-scale invasion of Ukraine in 2022 helped force a rethink on nuclear power in Europe as countries scrambled for gas supplies. With the Iran war now squeezing fossil-fuel flows again and sending prices surging, the continent’s energy mix is the subject of renewed debate.

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Von der Leyen said Wednesday that countries with cleaner power generation were faring better in the current energy crunch as they were better protected from soaring costs.

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—With assistance from Francois de Beaupuy.

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(Updates with shares in sixth paragraph, analyst comment in seventh.)

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