EDF deal boosts nuclear power plans

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The deal will net the Government more than £4 billion for its 36% stake in British Energy (BE) and will kick-start a wave of new UK plants.

EDF - majority-owned by the French government and the world's biggest nuclear power provider - said it wanted to construct and operate two reactors each at existing BE sites at Hinkley Point in Somerset and Sizewell in Suffolk.

The group is also in talks to sell a 25% stake in the new British Energy to British Gas parent firm Centrica, which wants to secure a power-sharing arrangement once the takeover is complete.

The deal, which is one of the largest ever direct foreign investments in Britain, will see EDF pay 774p a share - 9p higher than the price offered in July, which was rejected as too low by major British Energy shareholders.

The deal will need the approval of remaining shareholders, including institutional investor M&G. Should shareholders and regulators give EDF's takeover the green light, the sale is expected to go through by the end of this year or early next year.

Prime Minister Gordon Brown welcomed news of the takeover as "good value for the taxpayer and a significant step towards the construction of a new generation of nuclear stations".

EDF's planned new reactors have the potential to generate electricity to meet more than 13% of the UK's forecasted energy demand by the early 2020s, saving more than 14 million tonnes of CO2 emissions a year, according to the Government. The first of the reactors could come on stream by the end of 2017, it added.

British Energy employs 6,000 staff and produces around a sixth of the UK's electricity.

Pierre Gadonneix, chairman and chief executive of EDF, offered reassurance to British Energy's existing staff. He said: "We are keen in making British Energy involved in a new nuclear development in Britain. Among the assets in which we are very interested are the skills of the people of British Energy which would be involved in new nuclear development."