The UK nuclear generator British Energy Group (BE) has finally been sold to EDF.

The acquisition became effective on 5 January when the UK Nuclear Liabilities Fund (NLF) accepted the offer from EDF subsidiary Lake Acquisitions for its holdings in BE. The NLF’s 571,204,734 convertible shares, representing 35.54% of the company, brought Lake Acquisitions’ total BE holdings to 1,550,102,522 shares or approximately 96.44% of the company’s current issued share capital.

Swiftly after Lake Acquisitions announced the change of control of the company, it revealed the appointment of Humphrey Cadoux-Hudson, Anne Le Lorier, Vincent de Rivaz, Goulven Graillat and Jacques Regaldo to the board of BE.

EDF’s takeover of BE has taken the best part of a year to come to fruition. BE publicly acknowledged that it was in talks regarding a takeover or merger in March 2008. Several European utilities, as well as British Gas parent company Centrica, appeared to be potential purchasers of an interest in the company, whose sites are considered to be the best for new nuclear build in the UK. EDF had already announced its intention to build a fleet of EPRs in the UK, with the first unit starting up at the end of 2017.

EDF’s first two offers for BE were rejected but its third offer of 774 pence for each BE share, valuing the firm at £12.5 billion ($23.1 billion), was accepted in September 2008. Lake Acquisitions, the EDF subsidiary through which the acquisition has been made, also signed a memorandum of understanding to sell 25% of its stock to Centrica. That company would then have the right to 25% of any new nuclear plants’ output and would provide a sizeable British-owned interest. Centrica said its potential purchase of the stake would be undertaken for a matching 774 pence per share.

When the acceptance of EDF’s offer was announced in September, the UK government stood to gain £4.4 billion ($8.1 billion) from the sale of its 35.2% stake in BE held through the NLF. This, together with other holdings in BE, would add up to about £8 billion ($15 billion) which the government estimated should more than cover the current estimated costs of decommissioning British Energy’s existing nuclear power stations.

BE’s ownership of the UK’s prime potential new build sites, and EDF’s acquisition of land at possible new build locations, were marked by the European Commission as areas of concern in its consideration of the proposed sale under European Union merger regulations. The Commission was also worried by the potential for the merged company to withdraw electricity from the market, thereby increasing market price, and other possible negative effects on the electricity markets, and set a number of conditions on the sale to address its concerns. These include the sale of EDF’s 790MWe Sutton Bridge gas-fired plant and its1960MWe Eggborough coal-fired plant, plus the sale of certain minimum amounts of electricity to the wholesale market. The company is also required to unconditionally divest either the Dungeness or Heysham potential new build site and to end one of its three grid connection agreements with the National Grid at Hinkley Point, effectively opening up two sites to other would-be reactor builders.

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