Asset swap

Centrica has announced plans to acquire a 20 per cent interest in British Energy, the operator of eight nuclear power stations acquired by EDF in January 2009. EDF and Centrica will also form an 80/20 joint venture to pursue a planned programme to build four new nuclear power stations in the UK.

In turn, EDF plans to acquire Centrica's 51 per cent stake in Belgian generation and supply business SPE.

The investment and acquisition plans are still subject to regulatory approvals in the UK and in Europe, and approval by Centrica’s shareholders. The general meeting is planned for June 2009.

If the plan goes through, Centrica will invest £2.3bn for a 20 per cent stake in Lake Acquisitions, the vehicle through which EDF acquired British Energy. The investment represents a six per cent discount compared to the price of EDF's offer for British Energy.

Despite Centrica’s 20 per cent stake, EDF will continue to operate British Energy, but Centrica will have board representation and other appropriate governance rights.

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