Hanson's power plans face Offer threat

Offer, the electricity industry watchdog, may clamp down on moves by the Hanson conglomerate to become one of the UK's main generators if the Government blocks bids by National Power and PowerGen to buy regional electricity firms. Hanson, which has already snapped up Eastern Electricity and is taking over power plants from PowerGen, is among the frontrunners to acquire pounds 1bn worth of plant from National Power.

The Monopolies and Mergers Commission is to report within weeks on proposed takeovers by National Power and PowerGen of, respectively, Southern Electric and Midlands Electricity. Industry sources say that if these bids are stopped, the regulator would then question whether Hanson should be allowed to build up a powerful vertically integrated electricity company.

The view in the City is that the Government decided to refer the National Power and PowerGen bids because they would recreate the vertical structure - combining generation with regional distribution and supply firms - that was dismantled before the industry was privatised. Hanson's takeover of Eastern, coupled with its ambitions in generation, have a similar effect.

Announcing his decision late last year, Ian Lang, President of the Board of Trade, said: "I have decided to refer the PowerGen/Midlands Electricity and National Power/Southern mergers to the MMC because I consider that each of them raises competition concerns in the generation and supply of electricity in England and Wales."

Offer refused to comment on the structure of the industry and the implications of the MMC's report. However, one industry source said that Professor Stephen Littlechild, Offer's director general, had made plain his concerns. The source said: "If the generators' takeover bids are blocked on the grounds of vertical integration he would raise questions over Eastern's attempts to buy the National Power plants. That would be where he is coming from."

The MMC was originally due to report to ministers by the end of the week but on Monday was granted an extension to 4 April.

If Hanson succeeds in buying the three power plants from National Power, it would emerge as one of the largest UK generators. The group has already agreed to pay about pounds 400m for the lease of two generating stations from PowerGen and industry analysts estimate that it could have 12 per cent of the market in England and Wales within a few years. This compares with a projected 16 or 17 per cent for PowerGen and an expected decline in National Power's share to about 23 per cent or less, from 34 per cent last year.

Hanson is bidding for the National Power stations against companies including Applied Energy Services and Mission Energy of the US. Two other US groups, as yet unnamed, are also known to be in talks with the UK generator but at a less advanced stage. The plants are West Burton in Nottinghamshire, Ironbridge in Shropshire and Rugeley in Staffordshire. Both National Power and PowerGen have been forced to dispose of plant because Professor Littlechild wants more competition in the generating marketplace.

The delay in the MMC's report has fuelled speculation that it may recommend that ministers clear the bids, but only if the generators meet stringent conditions. It is thought that the companies would resist pressure to sell off yet more power plants, particularly in the light of government plans to privatise the most modern nuclear power stations as one company.

News
peopleHowards' Way actress, and former mistress of Jeffrey Archer, was 60
Sport
Romelu Lukaku puts pen to paper
sport
News
Robyn Lawley
people
Arts and Entertainment
Unhappy days: Resistance spy turned Nobel prize winner Samuel Beckett
books
PROMOTED VIDEO
News
people
Life and Style
Troy Baker and Ashley Johnson voice the show’s heroes
gamingOnce stilted and melodramatic, Hollywood is giving acting in video games a makeover
News
i100
Life and Style
Phones will be able to monitor your health, from blood pressure to heart rate, and even book a doctor’s appointment for you
techCould our smartphones soon be diagnosing diseases via Health Kit and Google Fit?
News
people
Extras
indybest
Travel
Ryan taming: the Celtic Tiger carrier has been trying to improve its image
travelRyanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Usain Bolt confirms he will run in both the heats and the finals of the men's relay at the Commonwealth Games
commonwealth games
Life and Style
Slim pickings: Spanx premium denim collection
fashionBillionaire founder of Spanx launches range of jeans that offers 'thigh-trimming construction'
News
Sabina Altynbekova has said she wants to be famous for playing volleyball, not her looks
people
News
i100
Life and Style
tech'World's first man-made leaves' could use photosynthesis to help astronauts breathe
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

BA/PM,EMIR/Dodd-Frank,London,£450-650P/D

£450 - £650 per day + competitive: Orgtel: My client, a leading bank, is curre...

Senior Analyst - ALM Data - Banking - Halifax

£350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...

Java developer - Banking - London - Up to £600/day

£500 - £600 per day: Orgtel: Java developer - Banking - London - Up to £600/d...

Day In a Page

Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

Commonwealth Games

David Millar ready to serve up gold for his beloved Scotland in the end
UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

UCI Mountain Bike World Cup

Downhill all the way to the top for the Atherton siblings
Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star