British Energy Deal Seems Done And Dusted
News that the £12 billion takeover of British Energy is nearing a conclusion has caused wide spread panic in political circles with concerns about the future pricing policy of the group as well as the employment prospects of those working for the company in the UK.
In a last minute change of heart EDF has agreed to sell a 25% stake in British Energy to Centrica for around £3 billion. Quite why Centrica was such a pivotal party in the deal is a little unclear but it looks as though the asset of British Energy may well be split up at some stage. However, in a rare bout of good news for Gordon Brown, the government will receive a £4.3 billion windfall for its remaining 35% stake in the business, fuelling claims that the authorities have sold British Energy down the river.
As the price of energy continues to rise in the UK, the fact that EDF has agreed such a high price suggests that they believe that prices have a lot further to go in the longer term. The deal will also hand over a large say in the UK's future nuclear energy program to a foreign operator, again attracting calls that they government should have blocked the deal.
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