EDF buys British Energy for £12.5bn

FRENCH group EDF has agreed a £12.5 billion takeover of British Energy in a move set to kick-start the UK's nuclear power strategy.

The state-owned utility giant will pay 774p a share, 9p higher than the price offered in July which was rejected as too low by major British Energy shareholders.

British Gas parent Centrica is also in talks to buy a 25 per cent stake in the new British Energy following the deal, it was confirmed on Tuesday.

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".

The deal will see EDF take control of all of British Energy's (BE) nuclear power stations and play a leading role in the development of new stations in the UK, which are likely to be built on BE's existing sites.

It will also allow the UK Government to bank a multi-billion pound windfall from its 36 per cent stake in the firm.

EDF said on Tuesday it planned to build four new nuclear reactors in the UK and would maximise the potential of British Energy's eight nuclear power stations.

But the Government has stressed that it wants other players in Britain's nuclear power industry.

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

EDF pledged to "recognise and appreciate" the importance of BE employees and said it would safeguard their employment and pension rights.