Senior executives from Britain's power industry have begun lobbying Government ministers to ensure that at least one UK company is involved in some capacity in the takeover of British Energy.
The nuclear company announced earlier this year that it would consider takeover approaches and is now understood to be holding talks with an array of suitors, including EDF of France, E.ON and RWE of Germany, and Iberdrola of Spain. Centrica is also in discussions with the company, but given the British company's total lack of expertise in the nuclear industry, it is understood to be more interested in a partnership or acting as an equity investor alongside another buyer.
The greatest concern surrounds EDF, the world's largest nuclear power company that is also more than 80 per cent owned by the French state. It is understood that the company's board gave the green light this week to the chief executive Pierre Gadonneix to make a bid for British Energy that could value the group at up to £9bn.
However, UK power company executives have made clear to the Government their concerns that handing ownership of the UK nuclear fleet, as well as the workers and expertise that go with it, to a single foreign owner could be debilitating for a sector of strategic importance to the UK. Centrica and Scottish & Southern, the only two major power companies still not owned by a foreign group, both declined to comment yesterday.
The Government recently hired the investment bank UBS to sound out buyers for its 35 per cent stake in British Energy. It has thus far expressed a laissez-faire attitude to British Energy's ultimate ownership. A source close to the situation said: "Look at our electricity companies. They are owned by Germans, French, Spanish. There is no reason why [British Energy] should be different."
Against the backdrop of Government plans for the construction of a new generation of nuclear reactors to be built, interest in British Energy is high. All but one of the company's reactors are set to be de-commissioned within the next 15 years, but it owns the most desirable sites for new plants.
Sector sources said that a purchase by EDF, already the country's second biggest retail supplier, would almost certainly attract the attention of the Competition Commission. It could be highly sensitive politically, as it would leave 20 per cent of the UK's power generation in the hands of the French government.
A deal could also attract a review from the European Commission. In Spain, EDF has held talks with ACS, a construction company that is the largest shareholder – 13 per cent – of Iberdrola. Speculation is rampant that the two companies could be plotting a joint bid for Iberdrola, owner of Scottish Power. Taking possession of either British Energy or Iberdrola, or both, would probably mean that EDF would have to divest assets to appease Brussels.
At least a dozen companies have been engaged with British Energy over the past year to put together proposals for the building of reactors on some of its sites. There is concern that if the company is taken over, that process will be scrapped altogether and give one company a nuclear monopoly.Reuse content