France’s electric company EDF may buy out British Energy
April 15, 2008
French electric company Electricite de France (EDF) enters international bidding war for nuclear power company British Energy.
France’s EDF, already the world’s biggest nuclear power generator with 58 reactors, is looking to broaden its reach with a buyout of the UK’s British Energy. EDF operates 19 nuclear sites in France where it provides more than 80% of the energy in France.
EDF will reportedly offer more than 700 British pence per share for the nuclear power company, which would make the deal worth upwards of $18 billion. Earlier this week, it was reported that Germany’s RWE had offered just under 700p a share while Britain’s Centrica had proposed an all-share deal, though that is considered unlikely as the company has no nuclear experience. Iberdrola of Spain is also in the running. British Energy shares have risen almost 40% since it emerged in February that the company’s board was considering a break-up or sale.
British Energy is 35%-owned by the British government.
The potential bidders are hoping to take advantage of the government’s renewed enthusiasm for nuclear power. A deadline for final bids is coming in the next few weeks.
The greatest concern surrounding EDF, the world’s largest nuclear power company, is that EDF is more than 80% owned by the French state. Therefore, a takeover of British Energy by France’s EDF could be highly sensitive politically, as it would leave 20 per cent of the UK’s power generation in the hands of the French government. There is also concern that if the company is taken over by EDF of France or any other single entity, that process will give one company a nuclear monopoly. At least a dozen companies from multiple countries have been engaged with British Energy over the past year for the building of reactors on some of its sites. A takeover by EDF would mean France gets the terrain all to itself.
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