Electricite de France (EDF) and Centrica are set to buy nuclear firm British Energy for more than £12bn, the BBC has reported on its website today.
Centrica, owner of British Gas, is negotiating with EDF to be its minority partner in the acquisition and may end up paying around £3bn for a 25% stake in British Energy.
However, the deal is likely to be controversial on several fronts – including whether EDF should be able to develop new power plants on existing British Energy sites.
There is also the issue of whether the UK's energy needs should be placed in the hands of a firm run by a French company.
Centrica, owner of British Gas, significantly expanded its presence in mainland Europe yesterday by winning majority control of Belgium's second-largest energy supplier, SPE.
The group matched the €515m (£406m) offered by state-owned EDF for the 25.5% of SPE held by Gaz de France. The two French groups struck a deal over SPE last month.
Centrica, which already owned 25.5% of SPE in a 2005 joint venture with GDF, said it would pay a further €105m this year under a government-brokered deal for Liège-based SPE to take power from Belgian nuclear power stations. The 2005 deal valued SPE at €969m.