Centrica Continues North American Expansion

Centrica will pay as much as $192 million to buy two power supply companies in Texas from American Electric Power Corp., as the UK utility company adds clients abroad to make up for lost market share at home. AEP is selling WTU Retail Energy and CPL Retail Energy, which supply power to more than 850,000 customers in and around Corpus Christi and Abilene, Texas, to focus on generation and trading. Centrica will pay between $133 million and $153 million for the units, after an upfront payment of $39 million. Centrica, the former UK monopoly supplier of natural gas, is expanding abroad and into other services to counter the loss in customers from its main business since the British market opened to competition in 1998. It plans to more than double its customers in North American to ten million by the end of next year. “They're still sticking to their 2003 customer target and we knew part of that expansion would have to be by acquisition,” said David Stedman, an analyst at Daiwa Securities SMBC “It's not a surprise.”