Merger of Scottish Power & SSE !?

The Business: The firm (SSE) and rival Scottish Power are to step up attempts to agree a £12bn merger against the backdrop of a fast consolidating UK market for power generation and supply. A SPW source said "There's been a meeting at Cazenove. The rationale for a link-up increased with the Powergen deal and it's increased again with TXU." Scottish Power would hold out for a big premium because problems at its US unit PacifiCorp have depressed its market value.

Comment: Imagine the efficiencies and extra pricing power the combined company will get from a merger! I expect a 25% premium at least being offered to SPW shareholders, although the merged companies should still continue climbing from the synergies.