1

Privatisations Privatisations The French and the Swedish perspectivesThe French and the Swedish perspectives

Sharing experiences …Sharing experiences …

Stockholm

Thursday, March 29 2007

2

Proposed AgendaProposed Agenda

Privatisations in France in a historical perspective

Privatisation routes applied by the French government

Role of Investment Banks

Some examples of recent French privatisations

3

Privatisations in France – Historical perspective Privatisations in France – Historical perspective

Build-up of portfolio of public companies Nationalisations in the 1930’s, in 1944-46 and in the early 1980’s Creation of government controlled companies

Airports, Motorways, Nuclear industry etc.

Launch of privatisation initiative in the mid-1980’s 1986 – 88: Launch of privatisation process

Saint-Gobain, Alcatel, TFI, Paribas, Suez, Société Générale etc.

1988 – 93: Some minor privatisations, but programme essentially on hold Péchiney, AGF, Total etc.

1993 – 97: Re-launch of privatisation initiative Rhône-Poulenc, BNP, Renault, Elf Aquitaire, AGF etc.

1997 – 2002: Selective privatisations France Telecom, Air France, Aérospatiale, Thales etc.

2002 onwards EdF, GdF, Aéroports de Paris, Autoroutes du Sud de la France (ASF) etc. Around €54bn raised in the market since the beginning of the current programme

4The French government has applied different The French government has applied different privatisation routesprivatisation routes The stock exchange routes

Stock exchange listing

Sale of shares in companies already listed on the stock exchange Accelerated bookbuilding

Marketed offerings

The M&A routes Disposal of stakes in listed companies

Mergers

Full or partial divestments of non-listed companies

5Key decision parameters and considerations Key decision parameters and considerations for the choice of route? for the choice of route? Value considerations

Stock market vs. M&A route (which route would maximise the value for the State?)

Full vs. partial exit - E.g. IPO to obtain market valuation followed by sale of majority shareholding to strategic investor (Motorways’ cases for example )

Timing: Market conditions at the time the company is ready for privatisation

Industrial considerations Creation of larger entities better positioned to compete in a global environment

Anti-trust issues

Political considerations Employment issues

Perception among the public

Process transparency

6

Role of Investment Banks?Role of Investment Banks?

Advisor to the Government

Advisor to the Company

Advisor to Buyers in the context of trade sales

In case of an IPO, the advisory mandate includes: Structure of the entity to be listed and transfer from a public status to a ”private like

status”

Preparation and execution of the market offering (Global coordinator / Bookrunner)

In case of market disposal of stakes in listed companies, the advisory mandate includes:

Evaluation of best timing and market technique (accelerated bookbuilding versus marketed offering for example)

Underwriting

Distribution

7

Role of Investment Banks – IPO routeRole of Investment Banks – IPO route

A 2-stage mission

Preparation of the company

Preparation of the market offering (IPO workshops)

Accounting, Business Plan and Valuation (relation with French CPT committee)

Equity story and Capital structure

Communication Marketing to analysts,

investors, retail networks

Roadshow

Timing and offering structure (primary/secondary, retail/institutional, free-float, syndicate structure, employee offering)

Due Diligence Documentation and

relation with market authorities

Selection of advisors (Financial, Legal, Communication, …)

Adaptation of regulatory/legal framework (legal status, shareholder agreement, company by laws,…)

Review of corporate organisation to fit with listed companies (corporate governance, …)

8The stock exchange route – Some recent The stock exchange route – Some recent examplesexamples

Initial Public Offerings (IPOs)

Aéroports de Paris, 2006, €1.4bn, Airport

EdF, 2005, €6.3bn, Utilities

Gaz de France, 2005, €4.0bn, Utilities

Sanef, 2005, €0.9bn, Motorways

APRR, 2004, €1.2bn, Motorways

ASF, 2002, €2.5bn, Motorways

Stakes sold through an Accelerated Bookbuilding

France Telecom, 2005, €3.4bn, Telecom

Bull, 2005, €19m, Technology

France Telecom, 2004, €5.1bn, Telecom

Air France, 2004, €0.7bn, Airlines

Thomson, 2003, €0.9bn, Electronics

Dassault Systèmes, 2003, €0.6bn, IT

Stakes sold through a marketed offering

Thomson II, 2000, €2.3bn, Electronics France Telecom II, 1998, €5.5bn, Telecom

9Initial Public Offering – EDF Initial Public Offering – EDF (Oct.05, €6.4bn)(Oct.05, €6.4bn)

Preparatory work

Transaction structure

Investment banks involved

Key facts of the transaction

More than three years of preliminary work: Progressive deregulation of the European and French electricity and gas industry Change of status into “Société Anonyme” (public limited company) Change of French law to enable opening of capital

IPO by way of a capital increase capped at €7bn Limited free float (11%)

French State advisors: Calyon, Morgan Stanley Company advisors: ABN Amro Rothschild, BNP Paribas, Citigroup Bookrunners (institutional offering): AAR, BNPP, Calyon, MS Bookrunners (retail offering): BNPP, Calyon

With a total final market offer of €6.4bn including greenshoe, EDF was the largest IPO in Europe since 1999. Overall demand was high: Retail demand reached 4.9 million individuals and was 1.6x oversubscribed Institutional tranche was 5x oversubscribed Allocation of 66% of the final offering to retail

Since the IPO, share price performed extremely well: EDF share price over-performed CAC 40 by 57.9% (as of March 26 2007) EDF share price over-performed DJ Stoxx Utilities by 31.9% (as of March 26 2007)

10

Accelerated Bookbuilding – Accelerated Bookbuilding – FT block disposal FT block disposal (June 05, €3.4bn)(June 05, €3.4bn)

Transaction background

Transaction structure

Process

Key facts of the transaction

This transaction followed a first disposal in September 2004 (following the vote of a law authorizing the French State to decrease its majority stake in France Telecom)

The offering took place rapidly following the expiry day of the lock-up

Accelerated bookbuilding with back stop

Offering structure with a minimum size + an extension of 15% + over- allotment of 15%

The APE (French government shareholding agency) launched a tender offer on Saturday 4 June with a submission of the proposal due on Sunday before 11.00.

French State announced the disposal early morning on the 6 June

Offer range : €22.5 - 22.85 (-1.6% to -0.1% discount to Friday closing). Final price set at €22.5

FT share price increased by 1.7% on June 7th on the back of buy-back of short positions and in heavy volumes (around 33 m shares)

11

The stock exchange route – Key take-awaysThe stock exchange route – Key take-aways

Aim at sufficient liquidity at IPO to enable accelerated deals post lock-up, either through a capital increase or a disposal of a block of shares

Involve diversified set of banks at the time of the IPO with strong local commitment and recognised brokerage capabilities to ensure aftermarket performance of the shares

Retail demand is key to secure success, especially for landmark transactions

12

The M&A route – Some examplesThe M&A route – Some examples

Disposal of stakes in listed companies to industrial purchasers Sale of a 50.4% stake in ASF to Vinci in 2005

Sale of a 10.9% stake in Crédit Lyonnais to BNP Paribas in 2002

Mergers Merger of DCN with Thales Naval Services (pending)

Merger of Suez with Gaz de France (pending)

Full or partial divestments of non-listed companies Sale of a 65% stake of SNET (coal thermal plants) in two tranches (2000

and 2004) to Endesa

13Privatisation of ASF: Privatisation of ASF: an example of value maximisation through a combination of the an example of value maximisation through a combination of the IPO and M&A routesIPO and M&A routes

March 2002: IPO 49% of ASF, France’s #1 motorways operator €2.6bn offering @ €25 per share

Institutions (56%), Retail Investors (40%) and Employees (4%)

Key aspects of the transaction : Legal framework providing stable conditions

ASF leadership position in France and expertise in concessions

Defensive characteristics of Toll Motorways

2004-05: IPO of remaining French motorways operators APRR and SANEF

Limitation of the free float (max 30%) to avoid unsolicited shareholders

Opportunity to float motorway companies with a high level of debt

14

July 2005: Divestment of remaining stakes in the 3 French motorways operators

Competitive process attracting numerous bidders

Vinci acquires the Government’s remaining 50.4% stake in ASF

Price: €51 per share vs. €25 at the time of the IPO

Privatisation through an IPO followed by a sale of a block enabled the Government to maximise proceeds

Education of the financial community (financing / valuation)

Pricing reference obtained through stock market rating

Privatisation of ASF: Privatisation of ASF: an example of value maximisation through a combination of the an example of value maximisation through a combination of the IPO and M&A routes (Cont’d)IPO and M&A routes (Cont’d)

15

Advisor to

Charbonnages De France

For the disposal of 65% of

SNET to

(2000 – 2004)

Involvement of Calyon in selected privatisationsInvolvement of Calyon in selected privatisations(2002 – to date)(2002 – to date)

Advisor to

Acquisition of a 16% stake in

Euro 1 110 m

November 2004

Advisor to

French State

Initial Public Offering

Euro 1.500 m

June 2004

Advisor to

ASF

Initial Public Offering

Euro 2.633m

March 2002

Advisor to

Kingdom of Morocco

Disposal of a 80% stake in

Euro 1 673 m

June 2003

Régie des Tabacs

Advisor to

CDC

Disposal of

EULIAto

Euro 3 100 m

July 2004

Advisor to

French State

Initial Public Offering

Euro 6 351 m

November 2005

Advisor to

In its acquisition by

Euro 5 933 m

March 2006

Advisor to

ADP

Privatization of

June 2006

Advisor to

French State

Sale of Alcatel’s satellite division to Thales

Euro 1 658 m

April 2006

Advisor to

French State

Merger with Thales Naval Services

Pending

Advisor to

French State

Initial Public Offering

Euro 4 006 m

June 2005