EdF Acquires British Energy for

123jump.com Staff
24 Sep, 2008
New York City

The French state controlled nuclear utility company agreed to acquire British Energy for

[R]1:00PM New York, 6:00PM - U.K. retail sales fall in September. EDF agrees to acquire British Energy for £12.5 billion.[/R]

London market averages fell marginally dragged by commodity stocks. In trading, the benchmark FTSE 100 index fell 0.79% or 40.55 to 5,095.57.

Of the FTSE 100 index stocks 34 advanced, 66 declined, and 2 were unchanged. London Stock Exchange led advancers in the index shares with a rise of 7.10%.

U.K Retail Sales Fall in September

CBI reported in its latest Distributive Trades Survey that 21% of retailers said the volume of sales in the first half of September rose from last year, while 48% reported that they were down.

According to CBI, the resulting balance of -27% shows the third straight month of sharply contrasting sales, but up from -42% that had earlier been forecasted by companies. The survey also adds that the outlook for October remains weak at -30%.

A balance of 46% firms noted that their volume of sales for the time of year was poor, and 44% expect a challenging October. Slowing demand also consequently affected suppliers as a balance of 39% of retailers reported a fall in order volumes from last year from -56% realized in August.

Also, stock levels were described as more than adequate to meet expected demand by a net 20% of firms. However, supermarkets managed to withstand the tough times, with a balance of 37% of grocers reporting sales growth in the review period.

Andy Clarke, Chairman of the CBI Distributive Trades Panel, and Retail Director of Asda, said although a drop in oil prices will give the sector a reprieve, shoppers are now increasingly focusing on the prices as the economy slows.

Clarke added that supermarkets that have registered growth are those that “have realigned their range to match the price conscious”.

EdF Acquires British Energy for £12.5 billion

The French nuclear power giant EdF agreed to pay £12.5 billion in cash for British Energy. The deal between the two nuclear energy utility companies creates one of the largest nuclear powered utilities in Europe. The revised offer is 9% higher than the previous offer in July.

Under the terms of the agreement, EDF will offer 774 pence in cash for each British Energy ordinary share.

EdF, operates 58 nuclear power plants in France and is the largest nuclear power utility company in the world according to its Web site.

Centrica PLC, the largest energy provider in UK agreed to acquire 25% stake in the wholly owned subsidiary Lake Acquisition Ltd of EdF that has agreed to acquire British Energy.

The British Prime Minister Gordon Brown welcomed the deal between the two companies and in the accompanying statement said that it will sell it 36% stake in the company.

In another deal, EdF is hoping to convince Constellation Energy based in Baltimore, Maryland to break its agreement to sell the company to MidAmerican Energy Holdings controlled by Warren Buffett.

In trading in London British Energy rose 6% and Centrica added 3% and in Paris trading EdF rose 5.4%.

Gainers & Losers

London Stock Exchange led advancers in the FTSE 100 index shares with a rise of 7.10% followed by increased in British Energy of 5.66%, in Eurasian Natural of 4.44%, in Lonmin Plc of 4.33%, and Friends Provident of 4.30%.


Inmarsat led decliners in the FTSE 100 index shares with a fall of 9.09% followed by losses in Vedanta Resources of 6.75%, in Aviva Plc of 6.43%, in Anglo America of 5.99%, and Xstrata of 5.28%.

Other commodity stocks fell as well. Antofagasta slumped 3.82% and Tullow Oil slid 3.40%.