Page last updated at 19:59 GMT, Tuesday, 23 September 2008 20:59 UK

EDF set to buy British Energy

Sizewell B nuclear power station
EDF is expected to confirm on Wednesday it is buying British Energy

French energy firm EDF is expected to announce a 12.4bn deal to buy British Energy, the firm which operates the UK's eight nuclear power plants.

In addition, Centrica, which owns British Gas, will take 25% of all power generated by British Energy once it is in French hands, the BBC has learnt.

It will also take a 25% stake in all new nuclear plants built by EDF.

The deal with EDF is seen by Centrica as vital to reducing its dependence on imported gas.

The cost to Centrica of this investment will be around 3bn.

EDF's acquisition of British Energy is due to be announced on Wednesday.

The deal will be controversial, BBC business editor Robert Peston says, because it will be seen by some as handing the UK's nuclear future to a company owned by the French state.

Centrica's investment may placate some critics.

The involvement of Centrica also helped to persuade British Energy's recalcitrant shareholders to back the sale to EDF, since they are also holders of Centrica shares, our correspondent adds.

Second time around

British Energy owns the UK's eight nuclear power stations and generates an estimated 14% of its electricity supply.

BRITISH ENERGY'S NUCLEAR PLANTS
Torness
Hartlepool
Sizewell B
Dungeness B
Hinkley Point B
Heysham 1
Heysham 2
Hunterston B

EDF is expected to build four new nuclear plants on existing British Energy sites and sell-on the remaining ones.

The UK government, which owns 35% of British Energy, is keen to ensure more than one company is involved in building the next generation of nuclear plants.

EDF was set to buy British Energy in July, but the deal was called off on the eve of the announcement when shareholders protested that it was being sold too cheaply.

Talks continued and EDF returned with an improved offer which has been accepted.

EDF is understood to have offered 774 pence a share for British Energy, nine pence more than its initial offer.




SEE ALSO
British Energy sees profits fall
13 Aug 08 |  Business
Centrica weighs up nuclear move
04 Aug 08 |  Business
UK nuclear energy deal collapses
01 Aug 08 |  Business
Q&A: Future of British Energy
01 Aug 08 |  Business
New nuclear stations planned
11 Jul 08 |  England
British Energy hit by shutdowns
28 May 08 |  Business

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