UK-based International Power has announced a tie-up with Europe's second-biggest utility, GDF Suez, which will form the world's largest independent power producer in terms of revenue, reports Reuters.
New International Power will be formed by the merger of GDF's international assets with International Power. GDF shareholders will own 70 per cent of the new company and International Power will hold the rest.
As part of the deal, International Power's shareholders will receive a special dividend of 92p a share, amounting to a total cash payment of £1.4bn. The British firm's chief executive, Philip Cox, will continue his role in the new company.
The BBC cites the UK group as saying that the deal would help make cost savings of £165m a year across the two existing businesses, with three-quarters of this achieved in the second year.
The merger is expected to be completed by the end of 2010 or early 2011, subject to regulatory approval and consultation with employees.
