Government welcomes British Energy sale |
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| Written by Gary Howes | |
| Tuesday, 06 January 2009 | |
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As EDF completes £12.5 billion purchase reports suggest Centrica will make an advance for 25% stake in British Energy.
Today will see the completion of a £12.5 billion purchase of British Energy Group plc by EDF (EPA:EDF). The Government has welcomed the completion today of EDF's £12.5 billion purchase of British Energy Group plc (LON:BGY).The purchase is a significant step in EDF's plans to build four new nuclear reactors in the UK Completion today, following regulatory clearance with conditions by European competition authorities in December, marks the culmination of the restructuring of British Energy. Since then, the challenge to tackle climate change has made the growth of new nuclear power more pressing and this transaction enables the UK to move further towards its ambition to become a low carbon economy. Centrica makes advances Earlier this year, Centrica (LON:CNA) signed a non-legally binding memorandum of understanding with EDF that gives it the option to acquire 25% of British Energy once the company's sale to EDF has been completed and regulatory approvals obtained. Today Dow Jones reported that Centrica is set to buy the stake within weeks. A 25% stake of this valuation amounts to GBP3.125 billion. Centrica is keen to have a share in new nuclear power stations in the UK as the company has less electricity generating capacity than its rival UK utilities and all of it is gas-fired. Decommissioning funding Business Secretary Lord Mandelson said: "Completion of this takeover represents not only a £12.5 billion investment in the UK by EDF but, in opening the way for new nuclear build, should provide many billions of pounds more opportunity for the UK supply chain." The sale, which includes the 36 per cent stake in the company held by the Government's Nuclear Liabilities Fund, raises approximately £4.4 billion towards the cost of decommissioning British Energy's existing nuclear power stations. EDF's takeover offer was announced on September 24.
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