The wealthy southwestern state said it planned in the medium term to sell most or all of the stake, which EDF had owned for a decade, in an initial public offering on the stock market.
Energie Baden-Württemberg (EnBW) is Germany’s third-biggest utilities group with six million customers, 20,000 employers and sales last year of €15.5 billion. It is active in electricity, gas and related services.
Another 45-percent stake in the company is owned by a grouping of energy firms in southern Baden-Württemberg known as the Zweckverband der Oberschwäbischen Elektrizitätswerke (OEW).
EDF, which in 2009 generated sales of €66 billion, said in Paris that it would use the proceeds to reduce its debt mountain.
Baden-Württemberg, which is due to hold closely fought state election in March, said that the deal was necessary because a shareholder agreement had been due to expire in late 2011.
“A change in the shareholder structure of EnBW was expected. In recent months there had been uncertainty, and we didn’t want to wait,” state premier Stefan Mappus said in a statement.
He added that a listing of EnBW would give the state a fourth company on the blue-chip Dax 30 index, together with auto giant Daimler, software maker SAP and HeidelCement.