UK utility Centrica is to pay £2.3 billion sterling for a 20% stake in British Energy - the nuclear operator bought by France's EDF earlier this year.
The two companies said today that EDF will also buy Centrica's 51% stake in Belgian generation and supply business SPE for €1.3 billion as part of the deal, with the balance to be paid in cash.
Centrica, which owns British Gas, said the acquisition of the British Energy stake helps it enter the nuclear sector - seen as protection against volatile energy prices - while the sale of its stake in SPE would strengthen its balance sheet and give it scope for further deals.
'The deal represents good value for Centrica shareholders, improves the strategic balance of our business and further underpins our green energy credentials,' Centrica Chairman Roger Carr said.
Centrica added in a separate statement that its earnings outlook for 2009 remained in line with expectations. It said lower wholesale gas prices were positive news for its household business, although the same factor would hit operating profit from its upstream, or producing assets.
EDF agreed to sell Centrica a stake in British Energy when it finally agreed terms for the acquisition last year, but the deal was complicated by a severe fall in wholesale electricity prices - key to BE's performance.
EDF will continue to operate British Energy, while Centrica will have board representation at the UK nuclear power group and take part in the building of four new stations.
The two companies said they aim to construct and operate four European Pressurised Reactors (EPRs). EDF said that buying control of SPE would make it the second-largest generator in Belgium. The deals are expected to be completed towards the end of the third quarter.
