EDF reaches deal to take over Italy's Edison
French electricity giant EDF said Tuesday it had reached a new agreement with Italian shareholders in Edison to take majority control of Italy's second biggest power company.
The new agreement in principle would see EDF increase its stake in Edison from around 50 percent currently, via direct and indirect holdings, to around 80.7 percent, EDF said in a statement.
In exchange Italian shareholders would gain control of the electricity production unit Edipower, which will enter into an agreement with Edison to supply it with gas for half of its needs for six years, the statement added.
"This agreement will allow the emergence of two energy champions in Italy which thanks to their stabilised organisation and a relaunch of their activity will contribute to the recovery of the growth of the Italian economy..." said EDF.
The takeover still needs the approval of regulators.
The new agreement follows months of difficult negotiations, with Italian shareholders threatening last week to abandon talks if they did not get control of Edipower.
Last week Fitch ratings agency cut Edison's rating by three notches to junk status, from BB- from BBB- due to "the negative impact of the prolonged negotiation process" as well as weak liquidity.
EDF has been involved with Edison for a decade and took a major stake 2005.
© 2011 AFP