EDF buys British Energy in £12.5bn deal

French utility EDF has agreed to buy nuclear operator British Energy (BE) in a £12.5bn deal that could kick-start the government’s nuclear plant building programme.

After much wrangling EDF raised its initial offer by 9p to 774p per BE share.

On Wednesday it proposed an alternative of 700p in cash plus one nuclear power note, a financial instrument linked to BE’s future performance.

EDF is in talks with British Gas owner Centrica to take a 25% stake in Lake Acquisitions, the EDF investment vehicle for the BE deal, at the same price per share as EDF is offering for BE.

According to the Guardian, this would allow Centrica to participate in EDF’s nuclear construction programme in the UK.

EDF plans to build four European pressurised reactors in the UK.

A London analyst told the newspaper: “It is positive for EDF and takes away the risk that they will pay off the wall, and the price is reasonable.

“There is clearly value in nuclear and building nuclear plants but it is quite long term.”