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A Harvard Business School student Pierre Gadonneix buyout plan: EDF buys British Energy

By Amarendra Bhushan for CEOWORLD Magazine Updated:September 24, 2008

Why not the CNN or BBC could have used a headline like “French Government (EDF’s largest shareholder) Takes Control of Britain’s Nuclear Industry” or “A Harvard Business School Takes Control of Britain’s Nuclear Industry”, but that, while true, wouldn’t it ?

French utility energy giant Electricite de France (EDF) is to purchase East Kilbride-based British Energy Group after both boards agreed on a price, EDF said in a statement. According to the agreed deal, EDF will pay STG12.5 billion ($A27.84 billion) for the group, which owns eight of Britain’s 10 nuclear power reactors.

The offer, equal to 774 pence per share of British Energy, represents a premium of more than 35 per cent over its closing middle price on March 14, when talks began between the two companies, and of nearly seven per cent over Tuesday’s closing middle price. The two companies have been in talks since spring, but EDF’s original offer of 765 pence per share was rejected by two investment funds that together controlled 22 per cent of the company.

The British government owns 36 per cent of British Energy and has been seeking new investment in its nuclear energy industry. In its statement, EDF said the takeover will enable it to become an active player in the British nuclear industry. It said it plans to build four EPR-type nuclear power stations in Britain.

EDF has targeted Britain, China, the United States and South Africa as the four markets in which it is looking to expand its nuclear energy business. However, French radio reported that unions representing EDF workers are opposed to the deal, judging it too costly and risky.

It will also allow Mr Brown’s Government to bank a multi-billion-pound windfall from its 36 per cent stake in British Energy, Britain’s largest electricity generator by volume. “New nuclear is becoming a reality… Nuclear is clean, secure and affordable; its expansion is crucial for Britain’s long term energy security,” said Gordon Brown, prime minister.

I wonder how long it’ll be before cheap energy is being sent to France via the channel electricity link while UK customers pay through the nose. Common sense suggests that if the quoted ’shortfalls’ in safeguards at Hunterston leave open the risk of fire at a nuclear plant which was due to close in 2011, there is little need to worry about terrorist action. An ageing and problem-beset plant with inadequate safety and, recently, a poor record of reliability is more likely to threaten life and national security all by itself. No need to wait for terrorists.

Who is Pierre Gadonneix?

Chairman and Chief Executive Officer of EDF

Pierre Gadonneix, born on 11 January 1943 in New York, has a PhD in business economics from the Harvard Business School, is a graduate of the Ecole Polytechnique (1962) and of the Ecole Nationale Supérieure du Pétrole et des Moteurs, and has a degree in economics.

An experienced businessman, Pierre Gadonneix has spent the major part of his career in industry.

On 15 September 2004, Pierre Gadonneix was appointed Chairman and CEO of EDF. Previously, since 1996, Pierre Gadonneix was Chairman and CEO of the Gaz de France group, after joining the company nine years earlier, in 1987, as President. His term of office was renewed in 1999. Under his impetus, Gaz de France undertook and completed its financial restructuring, pursuing a policy of rapid growth in France and in Europe as part of its strategy of integration along the entire gas chain. In a context of European market opening, Pierre Gadonneix has launched an industrial and social project aiming to position Gaz de France as a gas-oriented energy market leader in Europe.

Besides this, Pierre Gadonneix has other international responsibilities in the energy sector. In 2000, Pierre Gadonneix was elected Chairman of Eurogas, an international association bringing together gas companies and associations from 19 European countries, and in 2004, he became European Vice Chairman of the World Energy Council which brings together the principal players in the world energy industry.

From 1978 to 1987, Pierre Gadonneix was Director of Metallurgical, Engineering and Electrical Industries at the Ministry of Industry, where he contributed to the restructuring of the French steel industry.

In 1976, Pierre Gadonneix was appointed as technical advisor to the Minister of Industry and Research.

Before that, he worked as Director of the Institut de Développement Industriel (IDI), the leading French investment trust specializing in SME’s. He joined the institute in 1972, first as project manager and then as department manager.

In 1969, Pierre Gadonneix set up a computer service company, called SEFI, employing around fifty engineers. He managed the business for two years until its takeover by a major industrial group in 1972.

Pierre Gadonneix began his career in 1966 with the Elf Aquitaine group, as an engineer in the Computing Department, and then at the Commercial Division of Aquitaine Organico.

Pierre Gadonneix has served on the Boards of major industrial groups, including EDF (78/87), Elf-Erap (95/88), Usinor (87/82), Renault (86/78), SNCF (87/83) and France Telecom (2003/98).

Pierre Gadonneix is a member of the Conseil Economique et Social (economic and social council). From 1993 to 1999, he chaired the Conseil Français de l’Energie (French energy council).

Pierre Gadonneix published a doctoral thesis at Harvard in 1975 under the title “An attempt to meet the US challenge in the French computer industry”. He also taught economics at the Ecole Polytechnique for 10 years (from 1983 to 1992).

An Officer in the National Order of the Legion of Honour and Commander of the National Order of Merit and of the Order of Arts and Letters, Pierre Gadonneix is married with three children.

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