German energy giant E.ON is believed to be mulling over a move to acquire ScottishPower, the UK's fifth largest utility, as it looks to build upon its existing position in the country, where it is the parent company to Powergen.

Despite already being the largest listed energy utility in Europe, E.ON appears keen to keep pace with the growing trend of market consolidation in the increasingly liberalized European energy sector.

At a time when French power giant EDF has expanded its interests in Italy and major consolidations appear on the cards in Spain, E.ON has again turned to the highly liberalized UK sector to further the scope of its business.

E.ON purchased Powergen for GBP10 billion in 2001. Now the German outfit is seemingly tempted by the similar circa-GBP10 billion valuation of ScottishPower, one of the most successful companies operating in the UK power market in recent times.

Responding to speculation E.ON has stated that it is considering its options regarding a possible takeover offer for ScottishPower, but had made no formal approach so far.

However, if E.ON decides to move, a successful deal would certainly leave it in an extremely strong position in the UK electricity market. E.ON revealed in March that it had a war chest of E5 billion to spend on European acquisitions.

Meanwhile, the speculation has boosted Scottish Power’s share price by 4%.