Scottish & Southern Energy yesterday agreed to buy Dublin-based renewable energy company Airtricity for around £1.1bn, marking its biggest acquisition since the Perth-based utility was formed nine years ago.
Ian Marchant, SSE's chief executive, said the deal would likely be completed by late February or March, and that it included taking over 375m (£280m) of Airtricity debt.
He added that SSE, which is already UK's second-biggest power producer, would now also become the country's largest windfarm operator, and that the deal would take the group into Europe and Asia.
Marchant said the company now had "development opportunities" in Germany, Portugal, the Netherlands and China.
Meanwhile, Airtricity, Ireland's largest windfarm operator which is 51%-owned by Irish waste management firm NTR, has been expanding operations in the UK, and last year it won approval to build a windfarm off the coast of England.
SSE said the acquisition allowed it to expand its renewable energy generation capacity to 3500 megawatts by 2013.
Among the Airtricity assets to be acquired by SSE are a 308-megawatt portfolio of operating onshore windfarms in Scotland and Ireland, plus a further 187 megawatts of windfarms that have been given consent and are under construction. There is also a proposed 483-megawatt windfarm between Biggar and Moffat in the Borders, which is "in an advanced stage in the consent process".
The acquisition now pits SSE squarely against Iberdrola, the Spanish owner of ScottishPower, which is committed to maintaining its position as world leader in renewable energy.
However, Marchant disliked the notion that his company was being pitted against arch-rival Iberdrola, at least in the arena of renewable energy.
"I wouldn't be so rude to put it that way," Marchant said. "I would say the same themes are driving the policies of both companies."
Those "themes" are, of course, related to the government's commitment to reducing greenhouse gas emissions and lessening its dependence on natural gas supplies from Russia. It has set its sights on providing future electricity from a combination of renewables, nuclear power and clean coal.
In Europe, the EU have set a legally binding target that 20% of energy produced must be derived from renewable sources. The Scottish Government recently its target to generate 50% of its electricity from renewable sources by 2020.
Marchant said: "The combination of Scottish & Southern's and Airtricity's interests in renewable energy will provide an excellent platform for growth. Demand for renewable energy is only going to go up."
He added: "From a shareholder's perspective, this acquisition enables us to continue our track record of dividend growth well into the next decade."
Shares in SSE, which announced the Airtricity deal after the close of play on the London Stock Exchange, end the day down 1.3%, or 22p, at 1635p. In November, the company raised its interim dividend by 19.9% to 18.1p.
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