France's privatisation push with sale of national lottery stake

French Finance Minister Bruno Le Maire attends a news conference to kick off the listing of France's national lottery operator Francaise des Jeux (FDJ), November 7, 2019
French Finance Minister Bruno Le Maire attends a news conference to kick off the listing of France's national lottery operator Francaise des Jeux (FDJ), November 7, 2019 Gonzalo Fuentes, REUTERS

The French government has launched its biggest wave of privatisations in more than a decade, kicking off the process with the sale of the majority of its stake in the national lottery monopoly.   


President Emmanuel Macron’s pro-business government wants to raise money to invest in technology that could give France an economic edge in the future.

But opposition figures on both the left and right are worried that the former investment banker’s privatisation push is akin to selling the family jewels.

The government aims to sell down its stake in the Francaise des Jeux (FDJ) lottery operator from 72% currently to 20% when the shares are due to begin trading on Nov. 21.

Finance Minister Bruno Le Maire said the initial public offering, one of the biggest in Paris in years, was drawing strong interest from investors at home and abroad.

According to the prospectus, the listing should raise up to 1.7 billion euros ($1.9 billion) for the government, which it has earmarked for a 10 billion euro innovation fund and reducing the state debt burden.

Strong demand from domestic French investors, ranging from insurers to asset managers and private banks, is allowing FDJ to take on a dismal IPO market that has seen other big European deals scotched recently.

"The institutional placement seems to be going well, even very well, and that gives a very positive signal," a source working on the deal said.

If the listing goes smoothly, it could embolden the government to press ahead with other big asset sales, namely the more lucrative but politically trickier disposal of airports operator ADP.

Macron’s government wants to sell all or part of its 50.6% stake in ADP, worth around 8.6 billion euros, but opponents have organised an online referendum to stop it.

Legally the operation could be blocked if 10% of registered French voters, or 4.7 million people, sign the petition by March.

The opposition and unions are already up in arms over a planned overhaul of the pension system and another big privatisation would add further oil to the fire.

The last time a French government pushed through a big programme of privatisations was between 2005 and 2007 under centre-right president Jacques Chirac, who died in September.

Asset sales

The head of the state’s APE shareholding agency, Martin Vial, said that other corporate asset sales could follow provided that the companies were left with a solid French shareholder base and the price was attractive.

"Under these conditions, it’s possible there will be other operations to let the portfolio breath a bit," Vial told journalists at a presentation of FDJ’s IPO.

The offering of FDJ shares has been priced in a range from 16.50 euros to 19.90 euros, valuing it between 3.15 billion and 3.8 billion euros.

That makes it the biggest French IPO of the year, topping that of glass bottle maker Verallia, which went public in October with a market valuation of 3.2 billion euros and gross proceeds of 888 million euros.

Big French listings like Verallia and FDJ have been scarce in recent years and their success could boost Paris as an IPO market, especially after recent flops elsewhere in Europe and New York.

The government has reserved a third of FDJ’s share sale for retail investors, hoping to entice them by offering a 2% discount and one free share for every 10 bought.

The government wants to steer more of frugal French savers’ nest eggs into the financing of French companies to make them less dependent on foreign capital.


Daily newsletterReceive essential international news every morning