Centrica turns up heat on US market with purchase of stateside gas supplier

The British utility giant has agreed to a £476m deal with New Jersey-based Hess Corporation

by Gabriella Griffith
Last Updated: 31 Jul 2013
Centrica has upped its ante across the pond, purchasing the energy marketing unit of US oil giant Hess. The deal will cost £477m and is expected to make the UK utility giant the ‘leading business-to-business gas supplier in the eastern US’.

The deal is no random choice, Centrica chief executive Sam Laidlaw was at Hess for a whopping 20 years before leaving in 2001. The move is seen as part of Laidlaw’s strategy to double profits at Centrica’s North American downstream subsidiary, Direct Energy, over the next five years. Centrica has already racked up a hefty shopping bill in the North America this year having bought Texan firm Bounce Energy for £30m and going in with a Qatari energy firm to buy-up Canadian natural gas assets for £650m.

‘This transaction will transform our B2B operations in North America, giving us leading positions in business gas and power supply and creating a unique dual fuel business in the US,’ Laidlaw said.

‘It marks a significant step towards delivering on our strategy – substantially increasing the scale of our North American downstream business and integrating along the gas value chain – with the aim of doubling the profitability of our North American downstream business over the next three to five years.’

Laidlaw is expected to announce bumper half-year profits tomorrow thanks to the chilly spring Brits were subjected to. Warm, fuzzy feelings all around at Centrica then.

Find this article useful?

Get more great articles like this in your inbox every lunchtime