LONDON (CNNfn) - Houston-based utility Enron agreed on Monday to pay £300 million ($445 million) in cash for MG plc, a London-based metals trading company, to expand its fast-growing business in futures trading.|
Enron has diversified from its core business of power generating to become one of the world's largest players in electricity and gas trading. The industry has expanded rapidly with the deregulation of power markets, first in the United States and more recently in Europe.
The metals trading market is valued at around $120 billion a year. The purchase of MG gives Enron a foothold in the London Metals Exchange, the world's largest.
"Enron has been monitoring the global metals market for several years, and we believe now is the time to enter this market," Enron Chairman and CEO Kenneth L. Lay said in a statement.
MG (MGA) was listed in London last year after parent MG Technologies sold 51 percent of its shares. The German-based company has agreed to sell Enron the 42 percent of MG plc that it still owns.
Enron is offering 300 pence a share for MG plc, a 26 percent premium to its closing price on May 16, the day before it revealed that it was in takeover talks. The shares rose 8 percent in London Monday to match the offer price.
Enron (ENE: Research, Estimates) shares closed down 1/2 at 76-5/8 on Friday.