France/UK

French power company clinches British Energy takeover

Article published on the 2008-09-24 Latest update 2008-09-25 10:17 TU

British Energy Hunterston 'B' nuclear power station
(Credit: Reuters)

The French electricity company, EDF, announced Wednesday that British Energy had accepted its bid of more than 15 billion euros in a lucrative deal aimed at beefing up Britain's nuclear energy sector. British Minister for Business John Hutton said that EDF has plans to build four new nuclear reactors in the country, the first to begin in 2017, he said.

The takeover deal, which should be complete by the end of 2009, is "one of the largest foreign direct investments ever made in Britain," said Hutton.

Britain's Prime Minister Gordon Brown echoed those sentiments, calling the deal "a significant step towards the construction of a new generation of nuclear stations to power the country".

A new subsidiary, called Lake Acquisitions, will be created and will give EDF control of all of British Energy's nuclear power plants.

"For EDF, this is an historic milestone in our strategic development plans in Europe and enables the EDF Group to develop significantly in the UK, one of its key markets," said the group's chairman, Pierre Gadonneix.

One of EDF's priorities is to expand its holdings in the European and Chinese market, according to Jean-Marie Chevalier, professor of Economic Sciences at Paris Dauphine University.

"There is a renaissance of nuclear industry in the world, mainly because of CO2 and worrying about climate change and global warming, but this is a slow renaissance," said Chevalier.

"There are nuclear developments, but they are very slow and do not drastically change the picture," he added.

EDF had put in a lower offer in July, which was rejected by two of British Energy's shareholders.

The British energy sector has been privatised for many years, while the French state owns 85 per cent of EDF, the world's biggest producer of nuclear energy.