Demerger

Timeline

• Centrica plc was formed on 17 February 1997 following a demerger from British Gas plc, which was renamed BG plc at the same time.
• British Gas' Gas Sales and Gas Trading, Services and Retail businesses, together with the gas production business of the North and South Morecambe gas fields, were transferred to Centrica, which maintains the British Gas retail brand.
• British Gas plc's transportation and storage business (Transco) and the Exploration and Production (excluding North and South Morecambe gas fields), International Downstream, Research & Technology and Properties businesses remained with BG plc.
• BG plc was renamed BG Group plc in December 1999.
• Lattice plc was formed following a demerger from BG Group plc in October 2000.
• In October 2002 a 'merger of equals' took place between Lattice and National Grid to form National Grid Transco plc.
• National Grid Transco plc was renamed National Grid plc in July 2005.
• Centrica plc has been involved in no demergers or mergers since February 1997.
• Shareholders who bought British Gas plc shares as part of its privatisation in 1986, and have made no sales or purchases in the interim, will now have shares in BG Group plc, Centrica plc and National Grid plc.

Shares were acquired in Centrica plc at demerger from British Gas plc (now BG Group plc – 'BG') on the basis of one Centrica share for every BG share held at demerger. The split between the post-demerger Centrica and British Gas shares was in the proportion Centrica 27.053% and British Gas 72.947%.

Shares in Centrica plc, acquired on demerger, will be treated as having a base cost for capital gains tax purposes of 64.25 pence each (ascertained by reference to the value of Centrica and BG shares on 17 February 1997 and calculated in accordance with provisions of Section 272 of the Taxation and Chargeable Gains Act 1992).

The base cost of any holding of BG shares on that date will be adjusted on the same basis. The relevant prices on the London Stock Exchange on 17 February 1997 were: Centrica 64.25 pence; BG 173.25 pence. The base cost of the pre-demerger British Gas plc shares was split between the post-demerger Centrica and BG shares in the proportion Centrica 27.053% and BG 72.947%.

The original flotation of British Gas plc shares took place on 8 December 1986. The opening price on that day was 135 pence, and the market capitalisation was £5.6 billion. On 18 February 1997 the market capitalisation of BG plc was £7.8 billion and of Centrica was £2.9 billion.