Massive Franco-British energy link-up fails - Summary
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Mon, 18 Aug 2008 08:34
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London/Paris - A 12-billion-pound (24 billion dollar) takeover of energy giant British Energy by French firm EDF has fallen through because both sides apparently had second thoughts about the move, it was reported Friday. "The financial conditions for a major development in Britain do not exist at the moment," EDF head Pierre Gadonneix told journalists in Paris Friday, adding that his company was still interested "in playing an important role in the expansion of the British nuclear energy industry."Gaddoneix would not say if discussions were still ongoing between the two companies. According to analysts, two of the major shareholders in British Energy had rejected the offer at the last minute late Thursday. The deal had been expected to lead to a massive renewal of nuclear energy plants in Britain, and would have involved the sale of most of Britain's outdated nuclear power stations to the largely state-owned French energy firm. The move had been seen as the centrepiece of the British government's future plans for a revival of nuclear energy. Britain's Business Secretary John Hutton said Friday the government was disappointed the deal had fallen through. "We thought it was a good deal. We were ready to accept the deal," Hutton told the BBC. "We are disappointed by the failure to reach an agreement overnight. I think it would have been a good fit... I think it would have been a very sensible way to take forward new nuclear plans in Britain."However, he also said Britain's future nuclear strategy did not depend on a deal with EDF. "It's up to the board now and EDF to see if there is any way that this gap can be bridged but I think we are absolutely committed to new nuclear power and if this deal is not able to go through for whatever reason we will be looking at plans to make sure we can continue with our foot on the floor because Britain needs these new nuclear power stations."Hutton said discussions with British Energy shareholders who objected to the deal were continuing, and he hoped that the company's board would "try to find the right way forward.""I do remain convinced this is the right deal, but it's got to be acceptable to the shareholders and those are the discussions that are going on," he said. British Energy, in which the government has a 35-per cent stake, said "advanced discussions" had continued but that no agreement had been made to date. It added that there could be "no certainty" that the talks would lead to an offer being made. The British government has outlined plans to replace the country's 23 ageing nuclear reactors, which currently provide 20 per cent of the country's energy needs. It has made clear that the regeneration should go beyond "mere replacements" of existing plants and said there would be "no cap" on the proportion of nuclear energy in future supplies. "Alternative sources" such as wind and tidal power would also be boosted. Britain has relied heavily on its own North Sea oil and gas resources for decades, but soaring energy prices have accelerated the debate on the future of nuclear power for the country. Major gas and electricity supplier British Gas Thursday announced record price hikes of 35 per cent with immediate effect, following an increase of 22 per cent announced by EDF in Britain the previous week.
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