Centrica to take 51-per cent stake in Belgian business SPE

24 July 2008

Centrica plc today said that it would raise its shareholding in Belgian generation and supply company SPE SA to a controlling 51 per cent, after having exercised its pre-emption right over the 25.5 per cent interest in SPE currently held by GDF International SAS (GdF) after it acquired GdF's 50 per cent stake in their equal joint joint venture, Segebel SA.

This will be added to Centrica's existing 25.5 per cent interest. GdF was required to dispose-off its stake in SPE as part of the anti-trust remedies imposed by the European Commission as a condition to its approval of GdF's merger with Suez.

Centrica is making the acquisition through its subsidiary, Centrica Overseas Holdings Limited.

On completion, which is expected to take place in September 2008, Centrica will pay €515 million in cash for GdF's 25.5 per cent stake in SPE. In addition, deferred consideration of up to €105 million will be payable based on the final terms and the timing of approval of the "Pax Electrica 2" agreements under which SPE will acquire additional power offtake from Belgian nuclear power plants.

After taking into account estimated fair value adjustments resulting from SPE becoming a subsidiary of Centrica, the acquisition of the additional 25.5 per cent interest in SPE is expected to be broadly earnings neutral for Centrica in 2009.

In June 2005 Centrica had announced a 50:50 joint venture with GdF to acquire a controlling 51 per cent stake in Belgian energy company SPE, in a deal which valued the whole business at €969 million at the time, with Centrica and GdF each taking an effective interest of 25.5 per cent. The remaining 49 per cent of SPE will continue to be owned by a number of Belgian banks and municipalities.