French utility GDF Suez has agreed to buy the 30 percent of British power producer International Power it does not already own for 6.8 billion pounds, increasing its exposure to fast-growing markets around the world.
The 418 pence per share offer, at a 7 percent premium to an earlier approach by GDF, values International Power (IPR) at about 22.8 billion pounds and is expected to add to the French group's earnings.
IPR has leading positions in regions supported by steady energy demand such as South America, the Middle East, South-East Asia and Australia, GDF said on Monday.
The offer enables GDF Suez to take full control of a unique platform for development in fast growing countries, where the group intends to significantly increase its investments in the future, the company added.
Following completion of the offer, GDF intends to increase its guidance for capital expenditure in fast growing markets to 40 to 50 percent of the total, up from 30 percent currently.
Analysts have said a deal would make good strategic sense for GDF given IPR's strong growth prospects.
IPR said the offer, which will also see its shareholders getting a 6.6 euro cent dividend, was attractive, given the company's position in international power generation markets and its growth potential.
The company had earlier this month rejected a 390 pence per share preliminary approach by GDF that valued the company at 19.9 billion pounds, calling it too low.
IPR shares were up 3.3 percent at 417.3 pence in London, while GDF was up about 1 percent in Paris at 18.15 euros.
GDF completed its acquisition of 70 percent of IPR in February 2011, creating the world's largest independent power producer. At the time it agreed not to bid for the remaining shares for 18 months, a lock-up which expires in August
GDF Suez can buy out the remaining stake sooner with the agreement of the British group's independent non-executive directors.
(Reporting by Adveith Nair in London and Nina Sovich in Paris; Editing by Paul Hoskins and Giles Elgood)