22 Dec (NucNet): The European Commission today gave the conditional go-ahead for the proposed 12.5 billion pounds (GBP) (18 billion US dollars, 13 billion euro) acquisition of British Energy (BE) by Electricite de France (EDF).
The commission said the deal was subject to several conditions including a commitment by EDF to “unconditionally divest” a site potentially suitable for building a new nuclear power plant at either the existing Dungeness or Heysham nuclear plant sites in the UK. EDF is also required to sell certain minimum volumes of electricity in the British wholesale market.
According to the commission, an original takeover proposal submitted earlier this year could have raised competition concerns including the possibility of increased electricity prices.
The commission was concerned that the merged company may “withdraw electricity supplies from the market in order to increase price,” according to a statement. That “would have led to a reduction of liquidity which could have had negative effects in both the wholesale and the retail supply markets.”
The commission also said EDF and BE’s current rights to connections to the electricity transport network would have enabled the merged entity to hold connection rights “beyond its combined capacity expansion plans, with the risk of unduly delaying power generation projects of its competitors”.
The commission expressed concern that there are a “limited number of sites” for new nuclear units and “high concentration” in ownership. “British Energy owns many of the sites likely to be suitable for new nuclear build while EDF owns key land at two such locations,” it said.
However, the commission said both sides cooperated to draw up a package of measures to remove all competition concerns.
British prime minister Gordon Brown said in September 2008 that the deal represented good value for UK taxpayers and a significant step towards the construction of a new generation of nuclear stations to power the country.
Details are on the EU’s web site (http://ec.europa.eu/competition/mergers/cases/index/m104.html#m_5224).
– by John Shepherd
>>Related reports in the NucNet database (available to subscribers)
EDF Bid For British Energy Is ‘Good Value For Taxpayers’, Says Brown (News in Brief No. 113, 24 September 2008)
Sales Process Starts For Land Adjacent To UK Nuclear Sites (World Nuclear Review No. 46, 28 November 2008)
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