IP's link-up talks with French rival called off

International Power – the owner of UK assets including the giant coal-fired station at Rugeley in Staffordshire – yesterday said it had failed to reach agreement over a possible tie-up with France's GDF-Suez.

Despite preliminary talks over a possible combination with "certain power assets" of GDF-Suez the discussions are over, International Power said.

Shares in the firm – up as much as 10 per cent on Friday's close on speculation of a deal – slumped on the news to stand 3 per cent down on the day.

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The company's statement was in response to reports about talks between the pair over a partnership involving their foreign energy assets in a deal that would create one of the world's leading electricity partnerships.

International Power is one of the largest independent generators in the world with interests in over 45 power stations in 21 countries.

As well as Rugeley, which powers the equivalent of half a million homes, International is the majority owner of the First Hydro hydroelectric plants at Dinorwig and Ffestiniog in North Wales and the gas-fired station at Saltend, near Hull.

In August, the company reported half-year profits of 555m, an increase of 12 per cent on a year earlier after strong contributions from operations in Australia and Asia.

The company's Europe division, which includes its UK operations, saw profits fall by 9m to 290m in the six months to June 30.

GDF is 35 per cent owned by the French government.

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