DCC to acquire British Gas LPG in €64.5m cash deal

The business support services group DCC is to acquire Centrica's liquefied petroleum gas (LPG) business, British Gas LPG, for €64.5 million in cash.

The sale of the business follows a decision by Centrica to focus on its direct customer relationships in its core businesses, which include energy and other home services.

The British-based company offers gas and electricity supply under the British Gas brand, roadside and financial services through the AA, telecoms services through One.Tel and financial services through Goldfish. It also has energy businesses in Canada and the US.

Through British Gas LPG it sold gas mainly through third-party retailers and not directly to consumers.

Following the acquisition by DCC, the company will become the second-biggest LPG group in Britain, with a 21 per cent market share. It already sells gas in both Ireland and Britain. DCC is headquartered in Ireland and employs around 3,500 people.

DCC chief executive Mr Jim Flavin said the acquisition continued the strong growth momentum in the group's energy operations.

"This acquisition, along with the Alta Gas acquisition last year, will significantly strengthen DCC's position in the LPG market in Britain and is expected to lead to a substantial increase in the profit contribution to DCC Energy from this market," he said in a statement.

In the 12 months to December 31st, British Gas LPG posted operating profits of £2.3 million (€3.5 million) on a turnover of £54.1 million. For the eight months to August 31st, 2002, unaudited operating profits were £2.9 million. At the end of August, it had assets of £40 million and net debt of £2.1 million.

British Gas managing director Mr Mark Clare said the sale of the business was in line with the company's strategy of building deeper customer relationships and focusing on its core activities.

Analysts said the deal was a positive development for DCC but was not surprising.