French owned GDF Suez is to purchase 70 per cent of its British industry rival International power, it was announced today.
GDF Suez is offering International Power shareholders a cash sweetener of 92 pence per share in an agreed tie-up that will create the world's largest independent power producer in terms of revenue.
The two companies had entered abortive talks at the start of this year, but revived them last month.
GDF will put its GDF Suez Energy International unit into International Power and will then hold a 70 per cent stake in the new company.
The combined company, which will retain its London listing, will have generating capacity of over 66 gigawatts (GW) and revenues of €84 billion.
International Power Chief Executive Philip Cox and Financial Director Mark Williamson will retain those positions at the new company.
The British company is being advised by JP Morgan Cazenove, Morgan Stanley and Nomura, while GDF's advisers are NM Rothschild and Goldman Sachs.
The announcement came as the two reported first-half results today.
GDF, Europe's second biggest utility, reported a forecast-beating rise in operating profit to €8.2 billion, boosted by a cold winter that pushed power consumption higher, and stuck to its targets for this year and next.
International Power posted profit from operations of £524 million pounds, down from £555 million last year.
Reuters
