GDF Suez takes over Britain's International Power

10th August 2010, Comments 0 comments

French utility group GDF Suez will take over its British competitor International Power, the groups said Tuesday, creating what they called the world's top independent power company.

GDF Suez will pay a dividend of 92 pence per share to International Power stakeholders for a total price of 1.4 billion pounds (1.68 billion euros, 2.2 billion dollars), the two groups said in a joint statement.

The move will create "the global leader in independent power generation," transferring GDF Suez's international assets to the British firm to form a company called New International Power, listed on the London stock exchange, they said.

The French giant was formed in 2008 by the fusion of the public enterprise Gaz de France and privately held Franco-Belgian company Suez. It specialises in processing liquefied natural gas and energy production.

International Power runs 45 power plants worldwide. It said it had revenues equivalent to about 4.2 billion euros in 2009, compared with nearly 80 billion euros for GDF Suez.

The announcement came as GDF Suez reported its first-half results: a net profit of 3.6 billion euros, up 9.3 percent on a year earlier, due mainly to a particularly cold winter, the company said in a statement.

The deal "creates the leading global energy player in IPP (independent power production) with strong market positions in Latin America, North America, UK-Europe, the Middle East, Asia, and Australia," GDF Suez's chief executive Gerard Mestrallet said in the statement.

He later told a telephone conference that the tie-up would make the biggest public utility in the world in terms of revenues.

International Power's chairman Neville Sims added: "This is a strong combination of two world class businesses that have a highly complementary geographic footprint," in the statement.

"The combined company will benefit from significant synergies, a strong pipeline" of new projects and "broader access to high growth markets for further expansion," he said.

The companies forecast the tie-up would make them savings worth 197 million euros a year and yield combined turnover of 86 billion euros.

It promised "significantly enhanced growth prospects from a pipeline of committed projects and attractive further opportunities in high growth markets" such as Latin America and exposure to Asia and the Middle East.

The tie-up followed months of negotiations after an earlier bid by the French company at the start of the year fell through.

The companies expected it to be wrapped up by early 2011 after International Power recommended the deal to its shareholders for their approval.

GDF Suez shares slipped 0.54 percent on the Paris stock market on Tuesday morning, giving up earlier gains on the takeover and earnings announcement.

© 2010 AFP

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