24 April 2002 – The sale by US power company American Electric Power (AEP) of Seeboard, the south-east of England electricity supplier, has led to four companies being short-listed and an expectation the sale will yield AEP between £1.3bn ($1.9bn) and £1.5bn.
The short-listed companies are Electricité de France, E.ON of Germany, TXU of the US and Scottish & Southern all of whom have existing supply businesses in the UK and seek to add to their customer vase in order to achieve critical mass within the competitive European energy market.
Seeboard is the latest UK electricity retailer to be sold off by its US owner after the initial rush for ownership following privatization. US companies have struggled to achieve any profitability with the regional units, few of which are large enough to benefit from economies of scale.
This has led to a number of consolidations within the sector including this week’s £15bn merger between National Grid and gas system operator Lattice.
EdF owns London Electricity and the retail arm of SWEB, the south-west of England power supplier.
TXU, which owns Eastern Energy and Norweb, the north-west of England supplier, only wants Seeboard’s retail business and is looking for a partner to take over the power supplier’s local distribution network.
E.ON is in the process of buying Powergen, which supplies customers in the Midlands. Scottish & Southern operates largely in Scotland and southern England.
AEP has appointed Schroder Salomon Smith Barney to handle the sale of Seeboard, which it bought for £1.6bn in 1996.