EDF buys UK nuclear operator for £12.5bn

French energy giant EDF has agreed to buy nuclear operator British Energy in a £12.5bn deal, seen by many as the green light for building new nuclear plants in the UK.

The firm raised its initial offer - rejected by shareholders in July - by 9p to 774p a share in a sweetened offer.

British Gas owner Centrica is also in talks with EDF over taking a 25% stake in British Energy, which owns eight nuclear plants and the land around them - considered the best spots for building new reactors.

The government, which owns a 36% stake in British Energy, welcomed the deal as the “launch of a new era for low-carbon nuclear power”.

EDF plans to use the British Energy sites to build a raft of new plants, with the first expected to be operational by 2017.

Prime minister Gordon Brown said: “New nuclear is becoming a reality. This deal is good value for the taxpayer and a significant step towards the construction of a new generation of nuclear stations to power the country.

“Nuclear is clean, secure and affordable; its expansion is crucial for Britain's long-term energy security, as we reduce our oil dependence and move towards a low-carbon future.”

Business secretary John Hutton added: “EDF's recommended £12.5bn bid to buy British Energy would be one of the largest foreign direct investments ever made in Britain and demonstrates the attractiveness of the UK market to the private sector.

“And today is just the start. EDF's plans to build four new nuclear reactors will also create a wide range of jobs and a wealth of opportunities for Britain's manufacturers.”