Edison, PG&E; May Buy British Giant
Edison International of Rosemead and PG&E; Corp. of San Francisco were named Sunday as possible acquirers of National Power, Britain’s largest power company and now a potential takeover target.
The Sunday Times of London said an attempt was being made to assemble a consortium composed of a U.S. utility and a financial partner to acquire the British utility, which could be worth as much as $16.3 billion. The British government is National Power’s largest shareholder.
In addition to Edison, parent of Southern California Edison, and PG&E;, owner of Pacific Gas & Electric, the report also named Southern Co. as a potential suitor. The Atlanta-based utility holding company made a run at National Power two years ago, but was blocked by Britain’s then-Conservative government.
U.S. electric utilities have been on a buying binge in Britain over the last three years, paying $20 billion for eight of the 12 regional power companies. The buyout wave has sparked enormous controversy, especially last month when Texas Utilities’ $7.4-billion offer for Energy Group became the biggest deal to date.
Britain privatized its electricity industry in 1990 and has since become the first nation to open its electricity market to competition. U.S. electricity firms have bought into the British market partly to gain experience for the advancing deregulation of U.S. energy companies.
While not dismissing the report out of hand, PG&E; Corp. spokesman Greg Pruitt said his company is “focusing all of our financial and human resources on developing a national or U.S. energy strategy.”
Pruitt also pointed out that PG&E; last year unloaded almost all of its foreign energy ownership interests when it sold its stake in InterGen to Royal Dutch Shell. InterGen, which had been co-founded by PG&E;, has energy projects around the world. Currently, PG&E;’s only remaining foreign energy property is a 389-mile gas pipeline in Australia, which is for sale.
Tom Boyd, a spokesman for Southern California Edison--Edison International’s regulated utility subsidiary--referred inquiries Sunday to a spokesman at the Edison Mission Energy, the subsidiary that is in charge of the parent’s overseas investments. The spokesman did not return phone calls. Nor were Southern Co. officials available for comment Sunday.
Among Irvine-based Edison Mission Energy’s projects is its $1-billion acquisition in 1995 of First Hydro, a huge hydroelectric-pumped storage facility in Wales with generation capacity of 2,088 megawatts. That’s nearly as much as that of San Onofre Nuclear Generating Station, a 2,200-megawatt plant of which Edison is 75% owner.
British news reports said Edison’s investment in the Wales facility makes it a “likely” merger partner for National Power.
In a January interview, Edison Mission Energy Chief Executive Edward R. Muller told Electricity Journal that Edison saw “other opportunities” beckoning in Britain.
“When you have an asset like that, you have a lot of intellectual capital. . . . When you become that involved in the market, you learn, you think, and you see opportunities,” Muller said.
Edison Mission Energy also owns major power generation projects in Australia, Indonesia, Italy and Spain.
The Sunday Times said the acquiring consortium being organized could also include financial partners such as Japan’s Nomura Securities Co. and Industrial Bank of Japan. National Power would probably resist any takeover attempt, having outlined an overseas expansion and diversification plans of its own, the report said.
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Times wire services were used in compiling this report.
