Drax buys energy firm Opus Energy for £340m

Power giant Drax is set to buy energy supplier Opus Energy for £340m (€399m) as part of a strategy overhaul.

Drax Group, which runs the UK's largest power station in Selby, said the acquisition will create Britain's fifth biggest non-domestic energy retailer.

The company, which also announced the purchase of four gas turbine projects for £18.5m, is looking to move away from its coal burning legacy.

The announcement saw its shares rise by as much as 20%.

Drax wants to expand into direct energy supply and back-up power given that its station in North Yorkshire faces an uncertain future with coal plants forced to close by 2025.

Half of the plant has been converted to run on biomass, but the Government has not supported the conversion of the remaining coal units.

CEO of the Drax Group Dorothy Thompson said: "These initiatives mark an important step in delivering our strategy, contributing to stronger, more predictable, long-term, financial performance through greater diversification of the businesses, delivering more opportunities right across the markets in which we operate."

Gas and electricity supplier Opus Energy is the biggest provider to the business market, outside of the "Big Six" energy firms.

In a statement, the Board of Opus Energy said: “We are pleased to announce today that the shareholders of Opus Energy have unanimously agreed to accept Drax’s offer to acquire the whole of the Opus Energy group subject to certain completion conditions.

“Since its inception in 2002, the company has grown to become one of the UK’s biggest suppliers of energy to business customers, with a market share of 8.3% of non-domestic business supply and over 295,000 customer sites supplied.

“Our shareholders believe that the offer from Drax provides a unique opportunity which is strategically compelling for the Opus Energy group and which will allow the business to move forward to its next stage of growth.”