Acquisition

Centrica PLC
                  

Centrica and Gaz de France to acquire Belgian energy company

Centrica plc (Centrica) today announced that through a 50/50 joint venture with
Gaz de France SA (Gaz de France) it has conditionally agreed to acquire a
controlling 51 per cent stake in SPE SA (SPE), a Belgian energy company, in a
deal which values SPE at €760 million (£507 million).

At the same time, Centrica's existing 50/50 joint venture energy supply business
in Belgium, Luminus NV (Luminus), and ALG Nègoce, Gaz de France's 50/50 retail
joint venture in Belgium, will be acquired by SPE for shares, valuing the
entities at €207 million (£138 million) and €2 million (£1.3 million)
respectively. The 49% balance of the enlarged SPE will be held by existing
Belgian shareholders of SPE, Publilum (Centrica's existing partner in Luminus)
and ALG.

SPE is the second largest power generation company in Belgium with around 1.6 GW
of principally gas-fired production capacity and around 400 MW of capacity
secured under long term procurement contracts. The company currently has a
customer base of around 50,000 accounts comprising mainly Flemish electricity
customers. It has also secured default supply rights for a further 370,000
electricity customers, most of whom are expected to transfer to SPE when the
residential energy market in Wallonia opens in January 2007.

Luminus currently supplies around 800,000 energy customer accounts, primarily in
Flanders. ALG Nègoce has acquired default supply rights to around 180,000 gas
customers, most of whom are expected to transfer to the company when the
Wallonian market opens. The enlarged SPE business is therefore expected to have
a customer base of around 1.4 million energy accounts in 2007, a retail market
share of nearly 20%, with overall generation capacity and consumption broadly
matching. The experience of Luminus in operating in competitive markets in
Flanders since 2001 will add significant value to the future retail business of
SPE.

Sir Roy Gardner, Chief Executive of Centrica, said: 'Today's transaction creates
a strong, vertically integrated, energy business with real scale, and brings
together the complementary assets and skills of Centrica and Gaz de France.

'The enlarged company will be the clear number two in the Belgian energy market
and also provides Centrica with an excellent platform for further growth in the
attractive Benelux market.'

After taking into account the sale of its share of Luminus to SPE, the cash cost
to Centrica of this transaction will be €144million (£96 million).

Notes to Editors:

--  The agreed value of €760 million takes into account around €16 million of
    net cash on SPE's balance sheet at the end of 2004. On a pro forma basis in
    2004, adjusted for SPE's stake in Elia and some smaller financial
    participations which will be demerged before this transaction completes, SPE
    achieved EBITDA of €63 million (£42 million) and EBITA of €27 million (£18
    million) on net assets of €393 million (£262 million).

--  Completion of the transaction is conditional, amongst other things, on
    clearance by the European Commission and the necessary approvals from
    Belgian energy regulators. Completion is expected to occur in the second
    half of 2005.


Enquiries:
Centrica Media Relations      01753 494085
Centrica Investor Relations   01753 494900