French energy giant effectively take control of British nuclear power industry following £12.5 billion deal

EDF Energy offered 774p a share for the Scottish nuclear power company, snapping up enough shares to gain more than 70% control of the firm, including acceptances from the government and other major investors.

EDF has added to it’s already significant stake in Britain’s energy supply industry, albeit mainly in southern England. The 85% French government owned energy company will take control of British Energy’s eight nuclear power plants in the UK, and plans to build four new state-of-the-art nuclear power stations, all in England, with perhaps a “head office” presence in Scotland.

The sell-off was backed by the government, which stands to make £4.5bn from its stake in British Energy.

The Prime Minister, Gordon Brown, said: “This deal is good value for the taxpayer and a significant step towards the construction of a new generation of nuclear stations to power the country.”

Some reports, however, have suggested that the government actively encouraging the takeover by agreeing to sell its own 36% minority shareholding in BE is an abdication of responsibility and a short-sighted policy, all for a quick return of a few billion to the Exchequer to reduce the UK’s burgeoning national debt.

British Gas parent Centrica plans to buy a quarter of British Energy, worth around £3.1 billion, which was welcomed by the market after the long-awaited deal was agreed.

Centrica said it had signed a memorandum of understanding with EDF to take 25 per cent of the power generated by the enlarged group once the deal was completed.

EDF are reportedly preparing new concessions to combat the only remaining obstacles: the chance that the Office of Fair Trading (OFT) could refer the deal to the Competition Commission or that the European Commission could step in with its own reservations about the deal.

EDF will likely combine their newly expanded UK operations into a separate stand-alone company, with hopes that the deal should be finalised by the end of the year.