The Czech government, which holds a 70% stake in the state-owned electricity producer CEZ, is backing a plan to spin off CEZ's non-production assets. These assets include distribution, trading, customer sales, and power and gas distribution. The government intends to sell up to a 49% minority stake in these newly separated assets to investors. This strategic move is designed to generate the necessary cash to buy out minority shareholders in CEZ's generation business, ultimately giving the state full ownership of electricity generation without burdening public finances or CEZ's liquidity. The process may start next year, with options including a stock market offering, direct sale, or a share swap.
Industry and Trade Minister Karel Havlicek stated that the plan supports the government's goal of regaining direct control over electricity generation while keeping part of CEZ listed to attract private capital. CEZ is one of Europe's largest electricity utilities with a market capitalization of approximately $31 billion to $33 billion. The non-production assets slated for spin-off are expected to contribute about half of the group's forecast EBITDA, which was estimated at CZK 103 billion to CZK 108 billion ($4.95 billion to $5.19 billion) in 2025. This segment alone is valued at an estimated CZK 150 billion ($6.8 billion).
The spin-off of these mostly regulated assets is expected to appeal to a broader range of investors, particularly those who have avoided CEZ due to its nuclear or coal assets, potentially increasing its valuation. Proceeds from the sale of the minority stake would then be used to finance the purchase of shares from minority investors in the parent company. To fully nationalize the generation business and remove it from public trading, the government would need to acquire roughly another 20% of shares to cross the 90% ownership threshold, allowing for the squeeze-out of remaining shareholders at a fair price.
Prime Minister Andrej Babis has pushed for full control of CEZ to boost energy security, especially given the anticipated CZK 600 billion to CZK 800 billion ($27 billion to $36 billion) cost of the Dukovany nuclear power plant expansion. This move is seen as a way to nationalize the energy giant without placing an additional burden on the state budget. The plan, which will be tabled at CEZ’s annual general meeting on June 1, 2026, aims to secure control over a strategic energy company and one of the largest investments in modern Czech history.
While the state currently owns nearly 70% of CEZ, this is not enough to delist the company entirely. The buyout costs for minority shareholders are estimated to exceed CZK 200 billion ($9.6 billion) at current share prices. Leaving part of CEZ's distribution or trading businesses listed would ease the financial burden of buying out minority shareholders, who own 30% of the company. CEZ's CEO Daniel Benes suggested that the process could take up to two years once approved.
