Centrica share price: Group snaps up Danish energy trader

on Apr 21, 2016
Updated: Oct 21, 2019
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Centrica (LON:CNA) has inked a deal to buy Denmark’s Neas Energy for £170 million, the British Gas owner has said. The move is part of the FTSE 100 group’s strategy to expand in European energy trading.

Centrica’s share price has fallen into negative territory in today’s session, having dropped 0.42 percent to 235.10p as of 09:38 BST, as compared with a 0.22-percent dip in the blue-chip FTSE 100 index. The group’s shares have lost nearly 10 percent of their value over the past year, but have added just under eight percent in the year-to-date.
Centrica announced in a statement this morning that it had agreed to acquire Denmark-based Neas Energy, a provider of energy management and revenue optimisation services, for DKK1.6 billion (£170 million) in cash.

The British Gas owner noted in the statement that the acquisition, which is expected to close in the middle of the year, subject to regulatory approvals, was in line with the group’s strategy to expand its route to market services in Europe.
“Our new strategy recognises that the energy landscape is rapidly changing, with a trend away from large centralised power generation to decentralised technologies,” Centrica’s chief executive Iain Conn commented in the statement. The group’s trading expansion comes at a time when the British Gas owner’s profits are pressured by weak oil prices as well as competition in the company’s home market.
Reuters quoted analysts at Jefferies as commenting that “investors may be a little surprised that Centrica’s management are making a near 200 million-pound acquisition in current market conditions, particularly given their overriding need to convince investors of their capital discipline”.
Centrica updated investors on its recent performance earlier this week, saying that it was planning to reduce its headcount by around 3,000 this year. The company is also targeting £200 million of efficiency savings in 2016 as part of its £750 million per annum cost efficiency programme.
As of 10:12 BST, Thursday, 21 April, Centrica PLC share price is 235.10p.

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