Way clearing for Centrica to acquire £2.3bn stake in British Energy

Published on Thursday 12 November 2009 19:46

CENTRICA expects to secure regulatory approval on the sale of its Belgian business SPE "imminently", freeing the way for its acquisition of a stake in British Energy.

The Scottish Gas owner agreed a 2.3 billion deal with French energy giant EDF in May for 20 per cent of nuclear group British Energy in exchange for cash and a 51 per cent stake in the Belgian utility.

However, the deal is being held up as EDF awaits regulatory approval to buy SPE. While regulatory clearance is thought likely, the process is taking longer than the parties expected.

EDF sold the stake in British Energy to help fund the construction of a fleet of new nuclear stations in the UK.

Centrica's move for a slice of the nuclear market follows a decision to cut its dependency on the wholesale market, where it buys most of the electricity and gas it supplies to millions of British Gas customers.

The group doubled its gas reserves after winning a hostile takeover battle for Aberdeen-based Venture Production this year.

Yesterday Centrica said the 1.3bn acquisition of Venture had raised its gas production sufficiently in the short term, but it would continue to look at further acquisitions of North Sea gas assets to increase its reserves.

"The very nature of gas assets is that they're depleting as you go along," a spokesman said.

Gas assets are also being sought in North America, where its Direct Energy business also relies heavily on the wholesale markets.

Centrica is now integrating the Venture acquisition, with its upstream gas business recently relocated to Aberdeen.

Shares in Centrica dropped 0.7p to 244.3p yesterday.