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. Last Updated: 07/27/2016

Paper Reveals U.K. Feared Gazprom Buy

bloombergAlan Johnson
British Trade and Industry Minister Alan Johnson had eight meetings this year on how to block a potential takeover of British utility Centrica, the country's biggest gas supplier, by Gazprom, the Financial Times said on Monday.

The newspaper report, citing government officials and information gained under the Freedom of Information Act, said Johnson, along with other ministers, was briefed in February on the legal changes required to allow them to block a rumored bid by Gazprom for Centrica.

It said ministers were told that they would need to pass secondary legislation to block any takeover of the British Gas owner.

Laws to reduce political interference in mergers came into force in 2003, restricting ministers' veto rights to those cases that threaten national security -- an exemption that would not cover the energy sector.

The option of changing the law to extend this veto to energy companies was considered, the paper said, but was unnecessary, as no concrete bid emerged.

At the height of the takeover speculation in early February, the British government said it would take a hard look at any bid for Centrica from Gazprom and that any proposal would face "robust scrutiny."

A few weeks earlier, in January, state-controlled Gazprom was at the center of a political storm when it cut gas supplies to Ukraine over a price dispute, leading to shortfalls across Europe.

That move prompted fresh worries about security of supply in Britain, particularly given that domestic stocks of oil and gas are falling.

Britain, which has just emerged from its coldest winter in a decade, recently became a net importer of gas after North Sea supplies started to dwindle at a rate faster than previously expected.

"Let us see what kind of changes would be introduced, if any, as well as how these changes are to be applied," a Gazprom representative said by telephone Monday.

"We would need to know how the decisions would be made on which buyer is considered to be a threat and which isn't.

"We are generally interested in acquisitions in Great Britain, but we have never said anything specific about Centrica, and we are still not saying anything," he said.

(Reuters, MT)