Centrica consortium to buy Ireland's Bord Gais for $1.5 bn
25 March 2014
A consortium led by British multi-national utility Centrica Plc today struck a deal to buy the retail arm and other assets of Ireland's Bord Gais (BGE) for a total of €1.1 billion ($1.5 billion).
Centrica, along with Brookfield Renewable Energy Partners and iCON Infrastructure Partners, will acquire BGE, the vertically integrated energy business from Ireland state-owned energy company Bord Gáis Éireann.
Under the terms of the deal, Centrica will acquire BGE's gas and electricity supply business in Ireland and the Whitegate gas-fired power station, for €210 million (£175 million).
The €210-million includes working capital, a contingent payment based on future performance of BGE and value accruing to Bord Gáis Éireann from 1 January 2014 until the transaction closes.
iCON Infrastructure Partners will acquire BGE's firmus energy supply and regulated gas distribution assets in Northern Ireland and Brookfield Renewable Energy Partners will acquire BGE's renewable generation assets.
The BGE supply business is the largest dual fuel supplier in Ireland, with approximately 650,000 residential gas and electricity users and 30,000 business users.
The 445MW Whitegate gas-fired power station in County Cork, commissioned in December 2010, provides flexible generation capacity.
Centrica said that the transaction provides an opportunity to acquire a vertically integrated energy supply business in an adjacent market.
''Building on the existing capabilities of the business, BGE provides a platform for growth in Ireland, allowing Centrica to bring innovative propositions from our US and UK downstream operations and the potential to increase BGE's offering in energy services,'' Centrica said in a statement.
The business will be operated from BGE's offices in Dublin and Cork, forming part of Centrica's International Downstream activities and reporting to Centrica executive Eddy Collier.
Centrica's CEO, Sam Laidlaw, said, ''This is a unique opportunity for Centrica to take a first step in a neighbouring market with strong links to the UK, building on Bord Gáis Energy's existing capabilities and delivering value for the Group.
Based in Windsor, Centrica is the largest supplier of gas to domestic customers in the UK.
With dwindling customers, Centrica has recently been expanding overseas in order to shore up its balance sheet.
In 2011, it acquired First Choice Power for $270 million in cash and the Energy Marketing business of Hess Corporation in 2013 for $731 million in order to expand its presence in North America.
But last year it withdrew from the construction of two new nuclear power plants in the UK due to cost overruns and project delays.