GDF Suez mulls International Power tie-up

08:37, January 19, 2010      

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GDF Suez SA is considering a tie-up with International Power Plc that may lead to a partnership with the biggest UK-based electricity producer, two people familiar with the plan said.

Any deal between the two may not necessarily lead to GDF Suez taking control of the UK company, although no final decision has been made, the people said, declining to be identified because the talks are private.

GDF Suez, operator of Europe's largest natural-gas network, is seeking to increase its international gas business and also grow in nuclear generation. International Power, with a market value of $8 billion, has expanded operations in Asia and Australia as the global recession has eroded energy demand in the US and UK.

A spokeswoman for GDF Suez, declined to comment, as did Beth Akers, a spokeswoman for International Power. The Sunday Times reported that GDF Suez has made a takeover approach to International Power, without saying where it got the information.

GDF Chief Executive Officer Gerard Mestrallet spoke with International Power CEO Philip Cox just before Christmas, following months of discussions between the two companies on a potential takeover, according to the newspaper. GDF, which has received government approval to proceed, has yet to make a formal offer, the Sunday Times said.

Mestrallet said on Jan 13 the company isn't planning any "big acquisitions", and declined to comment on whether his company is interested in acquiring International Power.

GDF appointed Rothschild, BNP Paribas SA and Goldman Sachs Group Inc to work on structuring a bid comprising cash and shares, while International Power is being advised by Nomura, the Sunday Times said. A takeover deal could be worth 6 billion pounds ($9.8 billion), according to the Times.

GDF Suez has declined 11 percent in the past 12 months, giving it a market value of 64 billion euros ($92 billion), and was the second-worst performer in 2009 on the French CAC 40 Index.

Source: China Daily
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