Centrica plc (Centrica) today announced that through a 50/50 joint venture with Gaz de France SA (Gaz de France) it has conditionally agreed to acquire a controlling 51 per cent stake in SPE SA (SPE), a Belgian energy company, in a deal which values SPE at €760 million (£507 million).
At the same time, Centrica’s existing 50/50 joint venture energy supply business in Belgium, Luminus NV (Luminus), and ALG Nègoce, Gaz de France’s 50/50 retail joint venture in Belgium, will be acquired by SPE for shares, valuing the entities at €207 million (£138 million) and €2 million (£1.3 million) respectively. The 49% balance of the enlarged SPE will be held by existing Belgian shareholders of SPE, Publilum (Centrica’s existing partner in Luminus) and ALG.
SPE is the second largest power generation company in Belgium with around 1.6 GW of principally gas-fired production capacity and around 400 MW of capacity secured under long term procurement contracts. The company currently has a customer base of around 50,000 accounts comprising mainly Flemish electricity customers. It has also secured default supply rights for a further 370,000 electricity customers, most of whom are expected to transfer to SPE when the residential energy market in Wallonia opens in January 2007.
Luminus currently supplies around 800,000 energy customer accounts, primarily in Flanders. ALG Nègoce has acquired default supply rights to around 180,000 gas customers, most of whom are expected to transfer to the company when the Wallonian market opens. The enlarged SPE business is therefore expected to have a customer base of around 1.4 million energy accounts in 2007, a retail market share of nearly 20%, with overall generation capacity and consumption broadly matching. The experience of Luminus in operating in competitive markets in Flanders since 2001 will add significant value to the future retail business of SPE.
Sir Roy Gardner, Chief Executive of Centrica, said: "Today's transaction creates a strong, vertically integrated, energy business with real scale, and brings together the complementary assets and skills of Centrica and Gaz de France.
"The enlarged company will be the clear number two in the Belgian energy market and also provides Centrica with an excellent platform for further growth in the attractive Benelux market."
After taking into account the sale of its share of Luminus to SPE, the cash cost to Centrica of this transaction will be €144million (£96 million).