Two of the UK’s regional electricity companies, Scottish Hydro-Electric and Southern Electric, are to merge to create a new company called Scottish and Southern Energy.

The new group will have its headquarters in Perth, Scotland. Southern shareholders will receive one new share in the new company for each share they hold in Southern Electric.

Southern and Hydro-Electric are the only two UK regional companies formed when the industry was privatized that are not now either under foreign ownership or part of a larger group. Both companies had been tipped as possible buyers for London Electricity which has been put up for sale by its US owner, Entergy.