Electricite de France agrees to pay £1.5bn for Seeboard

Michael Harrison,Business Editor
Monday 06 January 2014 02:37

The state-owned power group Electricité de France yesterday strengthened its grip on the UK power industry by agreeing to pay £1.5bn for Seeboard, the electricity distributor for the South-east of England.

The purchase takes EdF's spending spree in the UK to more than £5bn and consolidates its position as one of the UK's top five power suppliers with 5 million customers, 10,600 staff and 5,000 megawatts of generating capacity.

Seeboard, which has 1.9 million customers in Surrey, Kent and Sussex, was put up for sale late last year by its US owner American Electric Power. The auction turned into a fierce four-way tussle between EdF, Eon, the German conglomerate which is already buying PowerGen, TXU and Scottish & Southern Energy.

The price paid by EdF works out at £309 per Seeboard customer and is the most expensive deal yet in the fast-consolidating UK electricity industry.

Rival bidders said EdF was able to pay the most because it is underwritten by the French taxpayer. But EdF's financial advisers insisted that the auction was "desperately close".

EdF now controls three electricity supply companies – London Electricity which it bought in 1999, Sweb, the supplier for south-west England, and Seeboard. In addition it owns the electricity distribution networks for London and eastern England and power stations in Lincolnshire and Nottinghamshire.

Vincent de Rivaz, group chief executive of London Electricity, described the Seeboard acquisition as "the final major component" in its development strategy for the UK.

He said that from now on the group would grow organically but would not put a figure on the number of customers EdF ultimately hoped to capture in the UK.

Mr de Rivaz also indicated there would be cost savings and job reductions after completion of the takeover but he pledged that there would be no compulsory redundancies.

EdF is paying £670m cash to AEP and assuming £722m of Seeboard's existing debt. In addition it is taking on £100m of liabilities relating to power supply contracts entered into by Medway Power, a gas-fired power station in Kent in which Seeboard has a 37.5 per cent stake.

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