GDF Suez SA (GSZ), the operator of Europe’s biggest natural-gas network, agreed to acquire the U.K.’s Balfour Beatty Workplace to expand in energy services.
GDF Suez will pay less than the implied value of 190 million pounds ($295 million) because it will take on pension liabilities and debt, the Paris-based utility said today in a statement. It expects to complete the transaction by year-end.
The French company, which owns power stations as well as gas pipelines in Europe, is pushing into energy services as demand for gas-fired electricity generation falls. The acquisition will allow the utility to diversify as it mothballs or sells unprofitable plants amid the economic slowdown.
Balfour Beatty Workplace provides building management and maintenance services to hospitals, local governments and schools, according to its website. The business is a unit of Balfour Beatty Plc (BBY), the U.K.’s largest construction company.
“This acquisition will consolidate the group’s significant European position in energy and facilities services,” Jerome Tolot, head of energy services at GDF Suez, said in today’s statement. The deal “will also create a strong position for GDF Suez in the U.K.”
Balfour Beatty Workplace’s customers include the government’s Department for Work and Pensions, GDF Suez said. The utility’s own Cofely business already employs 2,200 people in the U.K. providing similar services.
GDF Suez last week reported a 26 percent slump in first-half profit. The Balfour Beatty transaction will generate about 930 million euros ($1.24 billion) in annual sales, according to the French utility, which said it’s acquiring “substantially all” of Balfour Beatty’s U.K. operations in this area, which contributed 481 million pounds of revenue last year.
Balfour Beatty also announced the agreement in a separate statement today, saying it was advised by Citigroup Inc.
To contact the reporter on this story: Tara Patel in Paris at firstname.lastname@example.org