Belfast Telegraph

Centrica ruled out of the race to take over Viridian

By John Mulligan and Margaret Canning

British Gas owner Centrica is no longer in the running to take over Power NI owner Viridian, it has emerged.

Offers for the Belfast-based former plc Viridian, which also owns Energia in the Republic, have now entered their second round.

It's understood AES, EQT, I Squared Capital, AMP and Goldman Sachs Infrastructure are among those still in the running for the business.

While it had been expected that Viridian could fetch as much as €1bn (£0.77bn), it's more likely now that it could sell for around €850m (€657m).

Bahrain private equity firm Arcapita bought the business for £1.6bn in 2006. In 2010, Viridian sold its Northern Ireland electricity transmission and distribution business to the ESB for £1.2bn.

A sale would include two power stations in north county Dublin, and an extensive windfarm portfolio.

The identities of the parties who are still in the running for Viridian - including Swedish private equity group EQT - were reported in industry news website 'SparkSpread'. AES, part of Fortune 200 firm AES Corporation, already owns Kilroot and Ballylumford power stations in Co Antrim.

I Squared Capital and AMP are global infrastructure investment managers based in the US and Australia respectively.

According to a report by PwC this week, a record $55.3bn (£39.1bn) worth of mergers and acquisitions in the renewable energy sector took place last year around the world.

The figure was almost double the $28.3bn (£20bn) in deals that were sealed in 2014.

And despite global economic headwinds, PwC expects power and renewables deal momentum to remain strong in 2016. Ronan MacNioclais, power and renewables partner at PwC in Ireland, said that another "bumper year" for M&A in the power and renewables sector is expected in Europe in 2016, and that deal dynamics in the United States are also strong.

The National Grid is looking at a possible disposal of a majority stake in its UK gas distribution business, while a planned sale of German gas grid Thyssengas by Macquarie is also under way.

Mid-cap consolidation is becoming an important deal theme in the US power and utility sector as buyers' size up opportunities, according to Mr MacNioclais.

"There is the opportunity on the natural gas side to deploy long-term capital into these platforms, with premiums being justified not just by synergies but by rate base growth opportunities,

Power NI this month announced a 10.3% drop in its prices. It's the market leader in electricity in Northern Ireland with 67% of the market, and 528,000 domestic customers.

But a change of ownership is not expected to have any major impact on customers here.

Belfast Telegraph

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