French utility GDF Suez has agreed to buy the 30 per cent of British power producer International Power it does not already own for £6.4bn, increasing its exposure to fast-growing markets.
The 418 pence per share offer, at a seven per cent premium to an earlier approach by GDF, values International Power (IPR) at about £22.3bn ($36.2bn) and is expected to add to the French utility’s earnings.
“International Power is a leading global independent power generator with attractive future growth prospects driven by its strong market positions in Latin America, North America, the UK-Europe, the Middle East, Asia and Australia,” Neville Simms, Senior Independent Director at IPR, said in a statement.
International Power earlier this month rejected a 390 pence per share preliminary approach by GDF that valued the company at £19.9bn, calling it too low.
Simms said Monday’s offer was an “attractive proposal,” and that IPR’s independent directors will unanimously recommend it to shareholders.
GDF completed its acquisition of 70 per cent of IPR in February 2011, creating the world’s largest independent power producer. At the time it agreed not to bid for the remaining shares for 18 months, a lock-up which expires in August
GDF Suez can buy out the remaining stake sooner with the agreement of the British group’s independent non-executive directors.