Centrica stock rose sharply in February after a Gazprom official suggested a bid
The UK considered changing its merger control regime this year to block a potential takeover of Centrica, the UK?s biggest gas supplier, by Gazprom of Russia, The Financial Times reported Monday.
Alan Johnson, the trade and industry secretary who has been a vocal critic of protectionism in the U.S. and Europe, was briefed with other ministers in February on the legal changes required to allow them to block a rumored bid by Gazprom for Centrica, the Financial Times has learnt.
Centrica stock rose sharply in February after a Gazprom official suggested a bid for the gas company was being considered. Gazprom later said the remarks had been misinterpreted. However, the prospect of the state-run Russian gas company taking over the UK?s biggest energy supplier prompted frantic activity within the trade and industry department.
Over eight meetings, officials advised ministers on the ?impact of the proposed takeovers on the British energy sector?, according to information obtained under the Freedom of Information Act. The advice ?focused primarily on security of supply? and covered ?gateways for ministerial intervention?, the trade department revealed.
Officials told Johnson that he would need to pass secondary legislation to be able to block a Gazprom bid. Laws to reduce political interference in mergers came into force in 2003, restricting ministers? right to veto bids to those cases that threaten national security ? an exemption that would not cover the energy sector.
The option of changing the law to extend this veto to energy companies was considered, according to officials, but was unnecessary as no concrete bid emerged. However, the government is maintaining a watching brief on the Russian company, which has a stated aim of supplying a fifth of Britain?s gas by 2015.