STAFF at Southern Electric are waiting to hear the full effects of the merger with Scottish power company Scottish Hydro-Electric.

Unison, the largest energy sector union, was not unduly alarmed by the news of the merger, which involves a deal worth nearly £5bn.

Unison's head of energy Mick Brade said: "It's a cautious welcome in the hope that the merger will fend off interest from foreign predators and bring an end to all the speculation on the future of both companies."

Mr Brade has already called for an urgent meeting with Southern chief executive Jim Forbes to discuss the deal's implications for staff and potential redundancies.

The major new group, which will be known as Scottish and Southern Energy, will have its headquarters in Perth. Southern's shareholders will receive one new Scottish and Southern Energy share for every Southern share they currently own.

Southern chairman Dr Bruce Farmer said: "Both companies have an excellent track record of improving customer service and increasing efficiency."

Dr Farmer claimed the tie-up would produce good opportunities for Southern's current staff and said he looked forward to both companies' management and employees working together to benefit customers and investors.

The deal marks the latest stage of the consolidation of the UK utilities industry - Southern and Hydro-Electric (HE) are the only power companies not either in foreign ownership or part of a larger group. Southern's shareholders will hold about 55 per cent of the merged company.

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