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September 24, 2008 1:15 PM

Clifford Chance, Herbert Smith, and Slaughters on $23 Billion European Energy Deal

Posted by Brian Baxter

Sibling publication Legal Week reports that some of Britain's finest legal advisers have turned out for the nuptials between British Energy and Electricité de France.

Clifford Chance, Herbert Smith, and Slaughter and May are advising on a deal that would reportedly see Paris-based EDF, the world's largest nuclear utility, acquire Livingston, Scotland-based British Energy for $23 billion.

The merger agreement comes roughly six months after British Energy--the U.K.'s largest generator of electricity--revealed that it was speaking to several suitors about a potential buyout. At the time, the company appointed Clifford Chance as its lead legal adviser in takeover talks, with London-based M&A partner Mark Poulton heading up a team from the firm.

The British government owns a sizeable stake in British Energy as a result of the company's recent two-year restructuring, during which the government invested nearly $3.7 billion in the aging energy giant. (British Energy owns a slew of U.K. nuclear power plants that are near the end of their life cycles.) Slaughter and May has been retained by the British government to advise it on the company's potential sale to EDF.

London-based natural resources partner Mark Newbury, the head of the electricity group at Herbert Smith, is leading a large legal team advising EDF that includes M&A partner Michael Shaw. Legal Week's Jeremy Hodges reports that lawyers from the firm's London and Paris offices are working on the deal for EDF, which is owned by the French government.

Centrica, the U.K.'s largest gas supplier, is said to have reached a memorandum of understanding with EDF whereby it would purchase a 25 percent stake in the newly merged entity. Windsor, England-based Centrica had originally planned to bid outright for British Energy, retaining Linklaters for a potential offer.

The acquisition of British Energy will make EDF the U.K.'s largest power provider. The French energy giant is known for its nuclear expertise--77 percent of France's energy derives from nuclear power--and the British government has pushed for a complete overhaul of the country's increasingly outdated nuclear power plants.

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