Wednesday, November 29, 2006

Time to switch out of Scottish Power?

The River Tay on a warm evening.

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UK energy company Scottish Power have agreed to an £11.6 billion takeover by the Spanish firm, Iberdrola.

The price of energy could rise and jobs could be lost.

SNP deputy leader Nicola Sturgeon warned: "We remain convinced that this deal is not in Scotland's national interest.

"There are real fears that Scottish employees, Scottish consumers and Scottish taxpayers will be worse off as a result."

Dave Watson, Scottish organiser of Unison said: "The proposed takeover again highlights the nonsense of the so-called liberalised energy market where European companies can acquire successful UK companies whilst their home market is largely protected."

Scottish Power's chief executive, Philip Bowman, is expected to leave Scottish power with a package of between £3.5m and £4m in a mixture of shares, salary and bonus, to add to a £15m pay off received two years ago following the takeover of drinks company Allied Domecq, where he was also chief executive, by Pernod Ricard.

A large part of Iberdrola's investment is coming from the banks. Iberdrola is borrowing almost £8 billion from the Royal Bank of Scotland, Barclays and ABN Amro to finance the move.

If interest rates go up, will Scottish Power customers have to pay?

ScottishPower customers can switch utilities if they are dissatisfied.

Britain has six big energy suppliers. If Iberdrola acquires Scottish Power only two, Centrica and Scottish and Southern Energy, will remain independent. Powergen, npower and EDF Energy are owned by German utility companies Eon and RWE, and France's EDF group respectively.
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Stagecoach and Virgin

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