March 25, 2014 / 8:15 AM / 6 years ago

Centrica buys Irish energy supplier as profits sink at home

LONDON (Reuters) - Britain’s Centrica (CNA.L) and its consortium partners said on Tuesday they will buy the retail arm and other assets of Ireland’s state-owned Bord Gais for 1.1 billion euros ($1.5 billion), helping the utility expand abroad as it is losing customers at home.

Centrica will purchase Bord Gais Energy, Ireland’s biggest electricity and gas provider, and the 445-megawatt Whitehead gas-fired power station as part of the deal that is expected to close in the second quarter.

Its consortium partners iCON Infrastructure Partners and Brookfield Renewable Energy Partners will purchase Bord Gais’ distribution and renewable power generation assets, respectively, the companies said.

Centrica said the enterprise value of its share of the deal would be 210 million euros. The net consideration payable for the deal is 150 million euros, it added.

“This is a unique opportunity for Centrica to take a first step in a neighboring market,” said Centrica chief executive Sam Laidlaw in a statement.

Whitman Howard analyst Angelos Anastasiou said the deal will provide Centrica with a platform for growth in an adjacent market.

The utility, which owns Britain’s largest energy supplier British Gas, has come under fire at home for its dominant position in the retail market, prompting even Britain’s energy secretary of state to call for the firm’s grip on the retail market to be loosened.

Centrica reported a 6 percent fall in 2013 profits at its British Gas arm after it lost 362,000 customers over the year.

The government picked Centrica’s consortium as the preferred bidder in December after it had put the Bord Gais assets up for sale as part of its privatization program.

The deal concluded below the government’s 1.5 million euro target for the sale.

“All Bord Gais Energy staff will transfer to the new consortium,” Bord Gais said in a statement.

Centrica’s shares edged up 0.2 percent to 332.1 pence by 0809 GMT on Tuesday. ($1 = 0.7255 Euros)

Reporting by Karolin Schaps; editing by Keith Weir and Paul Sandle

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