SCOTTISHPOWER moved closer to French ownership this weekend amid a series of cross-border talks that would reshape the European energy market.
Electricité de France (EdF) and Spanish construction firm ACS are already targeting Spain's biggest utility, Iberdrola, owner of ScottishPower in a deal that would see the Scottish firm come under the control of the state-owned French utility.
Und
er the latest plans, the pair also want to buy Union Fenosa, the third-biggest Spanish utility.
The £70bn proposal coincides with a meeting planned in London this weekend between Prime Minister Gordon Brown and the French president, Nicolas Sarkozy, in a bid to develop a new generation of nuclear power stations.
Britain wants to capitalise on France's expertise, partly to replace the UK's ageing plants, but also to export nuclear technology.
It comes amid a round of negotiations that could restructure the European electricity sector. British Energy, the UK's nuclear generator, is in talks that could lead to a £7bn takeover, possibly by Germany's RWE.
Scottish & Southern Energy, the Perth-based independent, is also said to be in the sights of European bidders.
ScottishPower, which fell under the control of Spanish firm Iberdrola last year in a £12bn deal, is facing another change of ownership.
ACS, which owns 13% of Bilbao-based Iberdrola, would take outright control of the Spanish company then sell the Scottish assets to EdF. The French firm would buy a stake in Fenosa in which ACS has a 45% holding.
The transaction would become the biggest in the European energy sector, dwarfing the acquisition last year of Spain's Endesa by Enil of Italy.
However, the deal faces considerable hurdles, not least the financial capability of ACS to acquire Iberdrola which is three times its size.
Iberdrola would expect a high take-out price, largely because of its growing renewables business.
There is also talk of German utility E.ON getting in on the act in a three-way split with Fenosa.
Sarkozy and the Spanish premier, José Luis Rodriguez Zapatero, have also held talks whereby EdF would buy a stake in Iberdrola in exchange for giving the Spanish control of some French nuclear power stations.
EdF's proposed acquisition of Iberdrola has drawn political criticism, not least from Scottish First Minister Alex Salmond, who opposed the Spanish firm's takeover of ScottishPower, but is now battling to keep the firm out of French hands and is likely to be further angered by Brown's talks with Sarkozy over nuclear plants.
He said his government would have concerns if EdF launched a bid for the Spanish utility, arguing the UK energy market was already heavily concentrated and Scottish consumers and jobs could be at risk.
