The UK power generating company PowerGen may be preparing to sell off a coal-fired power plant as it bids to gain approval for its acquisition of the regional electricity company East Midlands. However, analysts remain to be convinced that this would be sufficient to satisfy the regulatory authorities, Reuters reports.
PowerGen agreed to pay Dominion Resources $3 billion for East Midlands. It is the company’s second attempt to buy a regional electricity company. An earlier bid for Midlands Electricity was blocked by the previous UK government.
The UK regulator, Offer, indicated that it would like to see further plant sales by both PowerGen and its rival, National Power, to increase competitiveness in the UK market. Analysts have suggested that the most likely plant to be offered is the coal-fired plant at Ferrybridge in Yorkshire.
Whether the sale of one plant will satisfy the regulator that PowerGen’s acquisition of East Midlands is not counter to its competitive aims remains questionable. The company might be asked to sell more plants, an analyst at Greig Middleton suggested. PowerGen has said it is confident its move to buy East Midlands will not be referred to the Monopolies and Mergers Commission.