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UPDATE 2-Five groups eye E.ON,RWE UK nuclear venture Horizon
May 4, 2012 / 2:46 PM / 5 years ago

UPDATE 2-Five groups eye E.ON,RWE UK nuclear venture Horizon

* Toshiba’s Westinghouse, U.S. firm Exelon among potential bidders

* Russian investors, Iberdrola/GDF Suez venture not part

* Deal discussions to take all summer

By Karolin Schaps

LONDON, May 4 (Reuters) - Five groups, including Chinese, U.S. and Middle Eastern investors, are interested in buying E.ON and RWE’s British nuclear joint venture Horizon, a senior industry source said, highlighting renewed international investor appetite for Europe’s nuclear industry.

“There are five groups interested overall. The preferred bidder will be the one who can take the site and build on it as fast as possible,” said the source, who has direct knowledge of the deals but who asked not to be identified.

RWE and E.ON, under pressure from their home country Germany’s move to phase out nuclear power, announced in March the sale of Horizon, which had planned to invest 15 billion pounds to build at least 6 gigawatts (GW) of new nuclear plants at two sites in Oldbury and Wylfa in Britain.

Parties interested in purchasing the venture include U.S.-based Westinghouse, owned by Japan’s Toshiba, a Chinese investor, U.S. power company Exelon and Middle Eastern investors, the source said without giving further details.

RWE, E.ON and Horizon refused to comment on the sales process.

Westinghouse UK also declined comment and Exelon said it continually evaluated all opportunities, including mergers and acquisitions, but did not want to comment on rumours about specific M&A activity.

Russian nuclear investors and the NuGen UK nuclear joint venture set up by Spain’s Iberdrola and France’s GDF Suez were not among those interested at the moment, the source said, but NuGen could still come forward with a proposal.

NuGen could not immediately be reached for comment.

A deal is unlikely to emerge before the summer as the foreign investors will need time to familiarise themselves with the UK market.

“It will take the summer to get the deal done just because all the people coming in have not been in the UK before,” the source said.

Staff at Horizon based in Gloucester continue working on the project whilst waiting for an investor to come forward.

“We are continuing with our activities vital to maintaining value in the project and supporting our shareholders,” a Horizon spokesman said.

Britain is in the process of reforming its electricity market to establish a system which will reward producers of low-carbon energy, including nuclear power.

Reform proposals are expected to be presented to parliament before the summer.

The NuGen joint venture and French utility EDF are two other groups planning to build new UK nuclear plants, which the government is looking to as one of the future low-carbon energy sources that will help to cut Britain’s greenhouse gas emissions.

EDF, together with junior partner Centrica, plans to build four new 1,600-megawatt (MW) European Pressurised water Reactors (EPRs) on sites at Hinkley Point and Sizewell, while NuGen has announced it will build 3,600 MW of new nuclear capacity at its Moorside site in Cumbria.

NuGen was dealt its own blow last year when UK partner utility SSE pulled out of the group to concentrate on renewable energy instead.

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