British multinational utility company Centrica has entered into an agreement to sell 2.3GW combined cycle gas turbine (CCGT) power stations to EP UK Investments (EPUK) for £318m ($403m) in cash.
The acquirer, EPUK is a subsidiary of EPH, which is Europe’s 7th largest power generator that owns the Eggborough and Lynemouth Power stations in the UK.
The purchase price of its operational Langage and South Humber Bank power stations is subject to customary working capital and other completion adjustments.
The transaction is part of Centrica’s strategy to shift investment towards its customer facing businesses, while reducing focus on large scale central power generation.
The acquisition is subject to EU merger clearance and is expected to complete during the second half of 2017.
EPH CEO Daniel Kretínský said: “This is a significant acquisition in our strategy of increasing our generation capacity in the UK market. The two CCGTs will complement our existing UK portfolio of Eggborough and Lynemouth power stations and our Eggborough CCGT development project.”
Centrica’s sale of large power plants is also part of its plans to explore opportunities in flexible peaking units, energy storage and distributed generation.
Established in 2015, Centrica’s Distributed Energy & Power business is aimed providing large energy users with distributed energy solutions.
In December last year, Centrica received Capacity Market agreements for two fast-response gas peaking plants at Brigg and Peterborough.
The company is also investing £180m in new flexible energy storage and gas-fired generation capacity.
Earlier this month, the utility company announced the sale of its joint venture (JV) CQ Energy Canada Partnership for C$722m (£413m) in an all cash deal to a consortium made of MIE Holdings, The Can-China Global Resource Fund and Mercuria.
Centrica said that the sale was part of its divestment strategy announced in July 2015.
In May, Centrica revealed plans to eliminate 1,500 jobs during the course of the year as part of its cost efficiency programme targeted to yield £750m in savings by 2020.
Image: The transaction is part of Centrica’s strategy to shift investment towards its customer facing businesses. Photo courtesy of Centrica plc.