International Power is to merge with GDF SUEZ’s international business and certain operations in the UK and Turkey to create a leading player in independent power generation.

The new company, named New International Power, will be 70 per cent owned by GDF SUEZ with International Power shareholders holding the remaining 30 per cent.

International Power shareholders will also become entitled to a cash payment of £0.92 per share following completion of the deal.

GDF SUEZ Energy International will be transferred to London Stock Exchange-listed International Power with €4.4bn (£3.7bn) of net financial debt as at 30 June 2010.

According to GDF SUEZ, the new entity will have more than 66GW gross capacity in operation and that further projects are expected to deliver an additional 22GW of gross capacity.

Gérard Mestrallet, chairman and chief executive of GDF SUEZ, said: ‘This agreement creates the leading global energy player in independent power production with strong market positions in Latin America, North America, UK-Europe, the Middle East, Asia and Australia.

‘The combined business will have both the operational expertise and the financial flexibility to capture the significant growth opportunities in international energy infrastructure markets over the next decade. International Power will be particularly well positioned to capture the growth opportunities in emerging markets, where energy needs will be strong in the coming years.

‘As a result of this transaction, GDF SUEZ will achieve its strategic objective of 100GW in operation and strengthen its worldwide leadership in power generation.’