GDF Suez takes control of International Power

[August 10, 2010]  PARIS (AP) -- GDF Suez SA said Tuesday it is taking control of Britain's International Power, making it the second French utility to run a U.K. competitor and creating the world's largest independent power producer.

The French electricity and natural gas company will pay shareholders of International Power 92 pence (euro1.10, $1.45) per share, or 1.4 billion pounds in total, to form a company with revenues of euro84 billion and capacity of 66 gigawatts.

GDF Suez, which also reported a 9.3 percent rise in first half profit on Tuesday, said it will transfer some its non-European, Turkish and British assets and euro4.4 billion of debt to International Power.

Partially state-owned GDF Suez will own 70 percent of the company, with International Power shareholders owning the remaining 30 percent.

The deal comes after French power provider EdF acquired British Energy Group PLC last year.

The new company, to be called New International Power, will have a strong market position in Latin America, North America, Britain, the Middle East, Asia, and Australia, GDF Suez CEO Gerard Mestrallet said in a statement.

"International Power will be particularly well positioned to capture the growth opportunities in emerging markets, where energy needs will be strong in the coming years," he said.

It will be listed on the British stock exchange and run by International Power's Philip Cox as CEO.

Sir Neville Simms, Chairman of International Power, said the two companies have "a highly complementary geographic footprint."

The announcement comes as both companies report first-half results.

GDF Suez reported Tuesday that net profit rose to euro3.6 billion in the six months through June as the company was helped by an especially cold winter in its home market of France.

The utility's income before interest, taxes, depreciation and amortization, or EBITDA, rose 4.3 percent to euro8.2 billion.

GDF Suez also confirmed its full year targets. It has said it still expects to achieve higher EBITDA this year than the euro14 billion it reported in 2009.

First-half revenue rose 0.3 percent to euro42.3 billion.

International Power said its net profit fell 49 percent to 199 million pounds (euro239 million, $317 million).

Shares in GDF Suez were down 1.1 percent at euro26.50 in Paris morning trade. International Power shares were down 3.8 percent at 365 pence in London.

[Associated Press; By EMMA VANDORE]

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