The UK government’s plans for nuclear power stations received a long awaited boost after French group EDF succeeded in clinching £12.5bn deal to buy British Energy. EDF will now build four new reactors to enhance the UK’s power generation capacity.

The government will gain more than £4bn from the deal through its 36% stake in British Energy, enabling it to start new power plants.

EDF, the world’s biggest nuclear power generator with a majority stake by the French Government, intends to construct and operate two reactors each at BE’s existing sites Sizewell in Suffolk and Hinkley Point in Somerset.

The French group is negotiating the sale of a 25% stake in the new British Energy to Centrica, which is interested in power-sharing after the completion of takeover.

EDF will pay 774p a share, 9p higher than what it had offered in July, but was rejected by BE shareholders as too low. The deal is the largest ever investment made by any foreign company in Britain.

The deal was welcomed by Prime Minister Gordon Brown as a significant step in building a new generation of nuclear power stations and providing good value for the taxpayers.

BE Chairman described the deal as good for shareholders, BE staff, nuclear industry and the country as a whole.

EDF’s planned reactors will be able to meet 13% of the UK’s energy demand by 2020, saving nearly 14m tonnes of CO2 emission annually. The first reactor will be in operation by 2017.

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