Centrica today announced that it has reached agreement to complete the acquisition of the retail gas and electricity business of ATCO Group in Alberta, Canada, on 4 May 2004.
The transaction, originally announced on 10 December 2002, will now be for an amended consideration of C$90 million (£37.5 million) in cash, equivalent to approximately C$90 (£37.50) per customer. Half is payable on completion and the remainder 12 months later.
This is less than the original consideration of C$128.5 million due to the impact of subsequent legislative and regulatory changes.
On completion of this transaction Centrica will acquire approximately one million customers in Alberta, representing 80 per cent of the province’s gas consumers and 14 per cent of electricity consumers.
This transaction means that Centrica now has over 5.1 million customer relationships in North America, where it is already the largest supplier of unregulated energy and related services to homes and small businesses. It complements Centrica’s other operations in North America and delivers another strong geographical hub through which the company can grow its business.
Centrica expects this transaction to reduce North American percentage operating margins in the short term as all customers will initially be on a regulated tariff allowing only pass through of costs. Value will be created through customers switching to deregulated tariffs and through cross selling of energy and related products and services.