British Gas plc, London, is closing in on its planned $1.1 billion (Canadian) takeover of Canada's largest gas utility.
The purchase of Consumers Gas Co. Ltd., Toronto, won approval last week from Investment Canada, a federal foreign investment screening agency. That action followed approval by the Ontario Energy Board, an agency of the province's New Democratic government.
Consumers serves natural gas customers in Ontario, Quebec, and New York state. The company is being sold by GW Utilities Ltd., which is controlled by the Reichmann family.
Among other things, British Gas agreed to make a public offering of 15% of Consumers shares by 1992, spend $30 million by Dec. 31, 2000, in Ontario for research and development focusing on efficient, "environmentally friendly" use of natural gas, make available at least $50 million (Canadian) for investment during the next 10 years in Ontario cogeneration projects to be chosen by British Gas, and create a $5 million venture capital fund to invest in Ontario energy and environmental technology during the next 5 years.
If the fund is fully spent at the end of that time, British Gas will invest another $5 million during the next 5 years. The provincial approval was seen as a test of the New Democratic party government's relationship with the business community.
The party's previous policy called for Canadian ownership of public utilities and resource companies. Ontario Premier Bob Rae said the cost of ownership of Consumers would be too high for his government, which has a deficit of $2.5 billion.
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