Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

Power sell-off is `potentially disastrous'

John Shepherd,Mary Fagan
Wednesday 17 April 1996 23:02 BST
Comments

Your support helps us to tell the story

From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.

At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.

The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.

Your support makes all the difference.

Politicians and consumer groups have attacked the planned pounds 8bn-plus takeover of National Power, one of the UK's prime electricity generating companies, by Southern Company of the US.

The Consumers' Association also weighed in heavily, slamming the American firm's plans as "potentially disastrous" for electricity customers and for competition in the industry.

The row broke yesterday after Southern, which only last year secured a strong position in the UK electricity market by buying SWEB for pounds 1.1bn, confirmed stock market rumours that it was planning to do a deal with National Power.

John Battle, shadow Energy Minister, said he doubted whether the Americans' aspirations were in the public interest or "the long-term interests of consumers."

A spokesman for the Consumers' Association added that "competition in the marketplace would be diluted rather than increased", and called for the Monopolies and Mergers Commission to take a "tough line" on electricity mergers to protect the consumers' interests.

While many City analysts are sceptical about the Americans' chances of success, because of the mountain of regulatory and political hurdles, it is understood that the Government is preparing to use its all-powerful "golden share" in National Power to engineer a dramatic shake-up of the electricity industry as long as Southern agrees to sell several power stations.

The formal announcement by Southern fuelled some heavy speculation in National Power's shares which, following the previous day's surge, soared 56.5p to pounds 578p - boosting the company's value by several hundred million pounds to pounds 8.3bn.

Southern has been preparing its plans to make a takeover move against National Power, which generates a quarter of the UK's electricity, for almost a year. The US company, however, is not thought to have had any formal contact with Ian Lang, President of the Board of Trade.

The bid has come at a bad time for Mr Lang, who is widely believed to be about to clear the way for National Power and its main rival, PowerGen, to resurrect respective takeover bids for the regional generators Southern Electric and Midlands Electricity.

The bids were put on hold last year after the Monopolies and Mergers Commission launched an investigation into the industry. News that the deals would be allowed to go ahead was leaked to the Economist last week, embarrassing the DTI.

Power shake-up, page 19

City Comment, page 21

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in