Acquisition

Scottish & Southern Energy PLC
7 August 2000

7 August 2000
                       Scottish and Southern Energy plc

               ACQUISITION OF THE SWALEC ENERGY SUPPLY BUSINESS


Scottish and Southern Energy has agreed to purchase the SWALEC energy supply
business from British Energy for an aggregate consideration of £210M,
consisting of cash and the repayment of inter-company debt.  In parallel,
agreement has been reached on a 10-year power purchase contract linked to
wholesale prices.

The acquisition of the SWALEC energy supply business, with its 850,000
electricity and 300,000 gas customers, represents a significant step in the
development of Scottish and Southern Energy's supply strategy. As a result,
the enlarged Group will have nearly four million electricity and one million
gas customers positioning the Group as one of the leaders in the developing
energy markets.  Scottish and Southern Energy intends to capitalise on the
strength of the SWALEC brand in Wales and believes that bringing it within one
of the UK's major energy companies secures its long term future.  This
transaction will also allow Scottish and Southern Energy to enhance the value
of its customer base by offering additional products and services.

It is intended that, by early 2002, SWALEC customers will be transferred onto
the existing Scottish and Southern Energy customer services system, building
on the experience gained earlier this year in transferring our Scottish
customers.

Significant synergy savings are expected, bringing the cost to serve SWALEC's
customers down to below the existing Scottish and Southern Energy level, which
is already 40% below the industry average.  As a result, the transaction is
expected to be earnings enhancing, even after goodwill, in the first year.

Background on the SWALEC energy supply business:

SWALEC supplies electricity to around 850,000 residential and business
customers and gas to around 300,000 customers. For the year ended 31 March
2000, the SWALEC energy supply business had a turnover of £571M. At that date
the business had net assets of approximately £210M, including goodwill.
Scottish and Southern Energy has acquired sole rights to the SWALEC brand and
all gas and electricity customers.

Power Purchase Agreement:

Building on the existing trading alliance between British Energy and Scottish
and Southern Energy, agreement has also been reached for a 10-year power
purchase agreement, initially for 10TWh.  The price will be linked to
prevailing wholesale prices, keeping Scottish and Southern Energy broadly
neutral to generation prices.

Regulation:

The transaction is not conditional on regulatory approval. Scottish and
Southern Energy is confident that it will secure the appropriate regulatory
clearances within the next three months.


Commenting on the acquisition, Scottish and Southern Energy's Chief Executive,
Jim Forbes said: 'The combination of the SWALEC energy supply business with
our existing businesses ensures that Scottish and Southern Energy will remain
a leader in the evolving energy supply markets. We look forward to building an
even more efficient and competitive business which will bring further benefit
to shareholders, customers and employees.'

Contacts:

Scottish and Southern Energy       Press Office (24-hour)        0870 900 0410

Financial Dynamics                 Andrew Dowler                 0207 831 3113
                                   Ben Foster

CSFB                               Simon Prior-Palmer            0207 888 8888