SSE to acquire Airtricity for €1bn

Scottish and Southern Energy (SSE) has shelled out over €1bn to acquire Ireland-based wind energy provider Airtricity as the company seeks to meet growing consumer and political demand for green energy.

Under the terms of the deal, which is subject to regulatory approval and is expected to close during the first quarter of the year, SSE will pay €1.08bn for Airtricity and take on its €375m debt.

SSE said the deal would more than double its operating wind energy capacity from 170MW to 480MW, making it the largest wind farm operator in the UK and Ireland. It added that with Airtricity also boasting 940MW of wind farm developments with either planning consent or already under construction the combined company expected to increase its total renewable energy capacity from 1,900MW to 3,500MW by 2013.

Ian Marchant, chief executive of SSE, said that recent policy changes, such as commitments from the Irish and Scottish governments to source respectively a third and a half of the countries electricity from renewable sources by 2020, meant that demand for renewable energy was only going to increase.

"Seven major public policy developments took place during 2007 alone, all of which point towards a material step-change in the amount of renewable energy that will be required in the future," he said. "The range of investment opportunities now available to SSE in renewables will become increasingly important as the world becomes more carbon constrained and the EU becomes more concerned about energy security."

He added that the combination of SSE's financial clout and Airtricity's project management experience meant the combined companies would be well placed to deliver rapid expansion in renewable energy capacity.

SSE said the deal would also allow the company to review its current target of reducing the amount of carbon dioxide per kilowatt hour of electricity, produced at power stations in which it has an ownership or contractual interest, by 20% over the ten years to 2016.