French EDF and British Energy agree on purchase deal
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Published
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Wed, 24 Sep 2008 09:31
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Paris - French energy giant Electricite de France (EDF) is to purchase British Energy Group after both boards agreed on a price, EDF said Wednesday in a statement. According to the agreed deal, EDF will pay 12.5 billion pounds (15.6 billion euros, or 22.9 billion dollars) for the group, which owns eight of Britain's 10 nuclear power reactors. The offer, equal to 774 pence per share of British Energy, represents a premium of more than 35 per cent over its closing middle price on March 14, when talks began between the two companies, and of nearly 7 per cent over Tuesday's closing middle price. The two companies have been in talks since spring, but EDF's original offer of 765 pence per share was rejected by two investment funds that together controlled 22 per cent of the company. The British government owns 36 per cent of British Energy and has been seeking new investment in its nuclear energy industry. In its statement, EDF said the takeover will enable it to become an active player in the British nuclear industry. It said it plans to build four EPR-type nuclear power stations in Britain. EDF has targeted Britain, China, the United States and South Africa as the four markets in which it is looking to expand its nuclear energy business. However, French radio reported that unions representing EDF workers are opposed to the deal, judging it too costly and risky.
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