UPDATE: EDF's Sweetened Offer For Edison OK'd By Italian Regulator

Electricite de France SA (EDF.FR) Friday confirmed that it improved its offer for Edison SpA (EDN.MI), securing approval of the Italian market regulator Consob and sealing an agreement that should end a more than two year battle for control of the Italian utility.

EDF has agreed to pay EUR0.89 per Edison share, or around EUR780 million, an increase from an initial EUR0.84/share, or EUR700 million, to increase its stake in Edison to 80.7% from 50%. The French state-controlled group will also launch a full takeover bid on the rest of the Edison shares, also offering EUR0.89 a share.

"The net incremental cost to EDF of this revised structure is a maximum of approximately EUR25 million," EDF said Friday.

EDF has been trying for more than two years to take strategic control of Edison, which would strengthen the French company's hold in Italy and bolster its natural gas exposure. But EDF's efforts have met with repeated opposition from the Italian municipalities that hold half of Edison, forcing it into paying more than it initially said it was prepared to.

The earlier deal were called into question when Consob in April, which demanded a price in a range of EUR0.84-EUR0.95. The Italian government has considered Edison to be a strategic asset, as more than half the country's power is natural-gas generated.

As part of the deal EDF will also increase the price offered to investment vehicle Delmi for its 50% stake in Transalpina d'Energia, which itself owns 61.3% of Edison. EDF, which already owns the other 50% of Transalpina, will offer around EUR780 million, from EUR700 million initially, to reflect its mandatory price offer for Edison.

As a result Delmi, which is controlled by Italian utility A2A SpA (A2A.MI), will increase to EUR680 million its offer for Edison's 50% stake in Edipower, which owns nine power plants in Italy. Delmi previously offered EUR600 million.

At 1005 GMT, shares in EDF were trading down 0.5%, at EUR16.22, while the CAC-40 benchmark index was down 1.0%.

-By Geraldine Amiel, Dow Jones Newswires; [phone]; [e-mail]