Centrica to take 20 per cent stake in British Energy

11 May 2009

British Gas owner Centrica said that it is acquiring a 20 per cent stake in nuclear firm British Energy for £2.3 billion. The company said it had originally agreed to pay £3.1billion for a 25 per cent stake in the British Energy.

However, the deal did not materialise as talk dragged on after electricity prices fell.

EDF had meanwhile taken over British Energy, which runs eight UK nuclear power plants in a deal that concluded in January this year.

Centrica and EDF have plans to build four new nuclear plants on existing sites as part of the UK government's plans for the country to increase its electricity from nuclear generation.

According to analysts it is the likely expansion that has attracted investment in British Energy.

Centrica said in a statement that the deal would be positive for both customers and investor as it lowered their exposure to energy price volatility.