EDF May Sell British Energy Power Station to Clear Competition Hurdles
EDF, the main electricity generation and distribution company in France, is considering the sale of British Energy’s sole coal-fired power station in order to avoid competition problems in its takeover of British Energy.
EDF, which is over 80 percent owned by the French government and is the world’s largest nuclear power provider, recently purchased British Energy for 12.5 billion pounds ($23.1 billion). EDF also supplies gas, electricity, and associated services to more than 38 million customers in France and Britain, as well as several other countries in Europe. British Energy is the UK’s largest electricity generator, owning eight nuclear plants and one coal-fired plant.
The deal still has to be approved by the EU, as well as British Energy’s shareholders, but EDF is confident it will be approved quickly. British Energy’s board has already recommended the deal to its shareholders. EDF is considering possible scenarios to smooth the way for the deal with anti-trust regulators. Critics say the acquisition will give the French government a monopoly on Britain’s electricity markets.
One solution proposed by EDF would be the sale of British Energy’s coal-fired power station in Eggborough, North Yorkshire. The plant is one of the UK’s biggest electricity generators. EDF believes that selling it would avoid the need for a phase two inquiry into the deal by the European Commission, which handles anti-trust regulatory matters. A phase two inquiry could take months.
The sale would settle worries that the deal would limit competition and drive up prices. Coal-fired power stations offer energy companies greater control over pricing because, unlike nuclear plants, coal-fired plants have greater flexibility on generating capacity. EDF already owns two other large coal-fired plants and one gas-fired plant in Britain.
Because the British government stressed it wanted more players in the nuclear power industry, EDF has also agreed to sell British Energy-owned land to other potential nuclear operators at some specific sites under certain circumstances, depending mainly on receiving planning consents from the British government to build four new nuclear reactors. This land sale is expected to accelerate development of new nuclear power stations in the UK by making attractive sites available to at least one other potential operator.
The owner of British Gas is also expected to acquire a 25 percent stake in British Energy from EDF at a later date. This move is anticipated to benefit British Gas by reducing its risk and exposure to volatile wholesale gas prices, as well as allowing it to invest in nuclear power plants.
The acquisition is expected to clear competition and regulatory hurdles, as well as shareholder approval, in late 2008 or early 2009.
About the author: Jason Hardy is an avid writer on legal issues, including international writing about many subjects including european antitrust lawsuits. Eu competition law interests Jason particularly. He resides in Seattle, Washington.
EDF, which is over 80 percent owned by the French government and is the world’s largest nuclear power provider, recently purchased British Energy for 12.5 billion pounds ($23.1 billion). EDF also supplies gas, electricity, and associated services to more than 38 million customers in France and Britain, as well as several other countries in Europe. British Energy is the UK’s largest electricity generator, owning eight nuclear plants and one coal-fired plant.
The deal still has to be approved by the EU, as well as British Energy’s shareholders, but EDF is confident it will be approved quickly. British Energy’s board has already recommended the deal to its shareholders. EDF is considering possible scenarios to smooth the way for the deal with anti-trust regulators. Critics say the acquisition will give the French government a monopoly on Britain’s electricity markets.
One solution proposed by EDF would be the sale of British Energy’s coal-fired power station in Eggborough, North Yorkshire. The plant is one of the UK’s biggest electricity generators. EDF believes that selling it would avoid the need for a phase two inquiry into the deal by the European Commission, which handles anti-trust regulatory matters. A phase two inquiry could take months.
The sale would settle worries that the deal would limit competition and drive up prices. Coal-fired power stations offer energy companies greater control over pricing because, unlike nuclear plants, coal-fired plants have greater flexibility on generating capacity. EDF already owns two other large coal-fired plants and one gas-fired plant in Britain.
Because the British government stressed it wanted more players in the nuclear power industry, EDF has also agreed to sell British Energy-owned land to other potential nuclear operators at some specific sites under certain circumstances, depending mainly on receiving planning consents from the British government to build four new nuclear reactors. This land sale is expected to accelerate development of new nuclear power stations in the UK by making attractive sites available to at least one other potential operator.
The owner of British Gas is also expected to acquire a 25 percent stake in British Energy from EDF at a later date. This move is anticipated to benefit British Gas by reducing its risk and exposure to volatile wholesale gas prices, as well as allowing it to invest in nuclear power plants.
The acquisition is expected to clear competition and regulatory hurdles, as well as shareholder approval, in late 2008 or early 2009.
About the author: Jason Hardy is an avid writer on legal issues, including international writing about many subjects including european antitrust lawsuits. Eu competition law interests Jason particularly. He resides in Seattle, Washington.
Labels: British Energy, electrical, energy, eu competition law, eu law, european antitrust lawsuits
posted by European Antitrust Law at
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