Peco Energy Co., the owner of Philadelphia's electric utility, agreed to buy a 49.9 percent stake in Sithe Energies Inc. from Vivendi SA for $680 million to capture a bigger share of the U.S. power market, Vivendi said.
The sale will reduce the French company's holding in Sithe North America to about 30 percent. Vivendi's total debt will be reduced by almost 4 billion euros ($3.6 billion), it said.
Vivendi, which agreed to buy Seagram and Canal Plus SA to develop in music, film and television, said last October it would sell Sithe to focus its utility on supplying water and hauling trash.
Peco is expanding through acquisitions to offset revenue lost after regulators ended its monopoly on eastern Pennsylvania.
Sithe owns power generation assets in New York, New Jersey, Maine and Massachusetts, markets where power prices tend to be higher than the U.S. average.
Sithe's 26 power stations produce about 3,600 megawatts of electricity and contributed 810 million euros, or 4.2 percent, to Vivendi's first-half sales of 19.4 billion euros.
In February, Reliant Energy Inc. agreed to buy 21 of Sithe's power plants in the northeastern U.S. for $2.1 billion. It also owns plants in Canada, Mexico, Asia, Africa and Australia.
Peco shares rose 7/8, or 1.9 percent, to 47 21/64 in New York Friday. Vivendi stock traded in Paris rose 0.3 euros, or 0.35 percent, to 85.9. Reuters
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