London Electricity lands Eastern

VAST swathes of London's electricity network are set to switch from American to French control after Electricité de France's London Electricity unit today picked up TXU's Eastern Electricity distribution arm in a £1.31b deal.

The deal, for £560m in cash plus £740m of debt, will bring a swathe of the power network in the city's northern boroughs including Haringey, Brent, Enfield and Harrow under the control of the giant French utility group. It includes a £40m payment to buy TXU's 50% stake in network maintenance outfit 24seven, which was established as a joint venture between London and Eastern in 1999.

Customers will see no change to their existing bills as they have the freedom to choose their individual electricity supplier, irrespective of which group owns the network. The deal will more than double the number of people served by London Electricity's network to 5.3m from two million, and add 54,000 miles to its 18,000-mile network, or 15% of Britain's total coverage-The purchase, which could be concluded by the year-end, needs approval from both British and European regulators.

In a separate deal, London Electricity has also bought the 2000MW West Burton power plant from TXU for £366m. TXU will use the proceeds to reduce debt and build its retail business in Britain, where it trades as TXU Energi, and Europe.