Hanson's power plans face Offer threat
Wednesday 20 March 1996
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.
The Sistine Chapel is set to be illuminated with thousands of LEDs
Gillian Anderson lays into gender disparity in Hollywood
- 1 Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
- 2 Prince held a Facebook Q&A and this is the only question he answered...
- 3 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 4 35,000 walrus gather ashore on north-west Alaska beach 'for a rest'
- 5 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
Prince held a Facebook Q&A and this is the only question he answered...
Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
Brad Pitt, on the moment he completely lost his temper with Clint Eastwood's son
Jennifer Lawrence nude photos leak: More celebrities allegedly targeted as third wave of hacked images released
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Mark Reckless becomes second Tory MP to defect to Ukip in a month
Should gay sex be illegal? 16% of Britons think so
Former Tory donor Arron Banks ups his Ukip donation to £1million following William Hague 'nobody' comment
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...