Acquisition

Centrica PLC
28 January 2002

28th January 2002


Centrica doubles its customer base in Canada


Centrica plc has reached agreement to acquire the home and business services
operation of Canada's Enbridge Inc for a total consideration of C$1 billion
(£437million). The transaction is subject to regulatory approvals and completion
is anticipated in the Spring.

The acquisition of Enbridge Services Inc will more than double the customer base
of Centrica's Canadian business. It offers the potential to market energy and
related products and services across a base of over two million households and
marks a milestone in the delivery of Centrica's strategy of exporting its highly
successful customer relationship model.

When this transaction is completed and after the Ontario electricity market
opens in May, Centrica will have over three and a half million product
relationships with North American households.

Centrica is the largest unregulated energy retailing company in North America,
with over 1.3 million gas customers in Canada and the United States. In
addition, it has signed up 600,000 electricity customers in Ontario in advance
of market opening at the beginning of May.

Enbridge Services has around 1.3 million customers to whom it leases water
heaters and provides residential services including heating, ventilation and air
conditioning (HVAC) installation and servicing. Approximately 325,000 of these
customers also have heating servicing contracts.

The majority of both Centrica's and Enbridge Services' North American customers
are based in Ontario.

The acquisition will be funded from existing debt programmes. Centrica is
exploring alternatives for refinancing the water heater assets and the consumer
loan portfolio to add value. These alternatives would be designed to
significantly reduce investment by Centrica, whilst retaining the customer
relationships and responsibility for installation, repair and servicing
activity.

Centrica's Chief Executive, Roy Gardner, said: 'We are very pleased to acquire
this business, which provides a platform for further growth in line with our
strategy of becoming a leading player in the provision of energy and essential
services in North America.

'This is a tremendous opportunity to combine the experience we have acquired in
the UK market with the expertise of our North American operation and we believe
there are significant synergies across these businesses. Our success in
developing multi-product relationships with UK consumers can now be replicated
in Ontario and will help us meet our growth targets for North America and
enhance the value of our customers there.

'Furthermore, we now have the opportunity to refinance these assets and free up
our own capital, in line with Centrica's strategy.'

In addition to the home services business, Centrica will acquire 90,000 natural
gas contract customers, a national business to business Heating, Ventilation and
Air Conditioning (HVAC) operation with more than 50 national accounts, a start
up residential HVAC business in Pennsylvania, and a consumer loan business that
supports its retail and HVAC business. It will also acquire 14 retail outlets in
southern Ontario.

The business had net assets of C$676 million (£295million) at 30 September 2001,
including C$122 million (£53million) for the consumer loan portfolio. Earnings
attributable to the assets in the nine months to 30 September 2001 were C$55
million (£24million) before interest and tax. Centrica will not be assuming any
net debt associated with the business nor the liabilities associated with the
finance book.

Enbridge Services has more than 1400 direct employees and has franchise
agreements with eight major suppliers outside its core area.



Notes


 1. The acquisition will be made through Centrica plc's wholly owned
    subsidiaries, Centrica Canada Ltd and Centrica US Holdings Inc.
 2. The acquisition is subject to approval from the Competition Bureau and
    Investment Canada. Completion is anticipated in the Spring.
 3. The Ontario electricity market opens on 1st May 2002 and customers will 
    begin to transfer to Direct Energy from that date.
 4. Centrica trades as Direct Energy in Canada and as Energy America in 
    Michigan, Ohio, Maryland, Pennsylvania, Georgia and Texas. It also owns 
    Greensource Ltd, a home services business in Ontario.
 5. In the UK, Centrica trades as British Gas, Scottish Gas, the AA, Goldfish 
    and One.Tel.



Enquiries:

Investor Relations: 01753 494900

Media Relations: 01753 494085



                      This information is provided by RNS
            The company news service from the London Stock Exchange