Europe: EdF Expands UK Operations

Electricité de France (EdF) has strengthened its presence in the British electricity market with its takeover of Eastern Electricity, formerly TXU Europe's UK power distribution firm. TXU Europe sold Eastern Electricity to London Electricity Group, which is owned by EdF, for £1.31 billion (US$1.9 billion). The purchase included the 24Seven management and maintenance facility. EdF also paid TXU £366 million (US$520 million) for the West Burton 2000-MW coal-fired power station.

After acquiring London Electricity in December 1998, EdF now controls a network covering southeast and southwest England as well as greater London. The Eastern Electricity acquisition is another step in London Electricity's development; however, EdF envisages further purchase in the United Kingdom and continental Europe. It already has expressed interest in acquiring Seeboard if it were up for sale. EdF continues to expand in Europe following the opening of 30% of the French market in which it has lost 112 clients representing 17.6 billion kWh, or 15% of its business. The U.K. purchase, which is before the European Commission for approval, follows its recent acquisition of a 34.5% shareholding in Germany's EnBW and 18% in Italenergia. EdF's aim is to realize 50% of its total turnover outside France by 2005. It then hopes to be controlling 22% to 23% of the European market, rather than the 18% it now controls.
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