Centrica Says It's Less Inclined to Pursue Retail Energy M&A in Certain U.S. Regions

Centrica, in discussing earnings yesterday, has revealed which regions it finds most attractive for mergers and acquisitions for its North American business, Direct Energy

"At the moment, in the Northeast [U.S.], we're less inclined to go forward with M&A," said Chris Weston, Managing Director of Centrica's International Downstream businesses

"Maybe in Texas, it's still attractive," Weston said, in response to an analyst question regarding whether compressed margins had Centrica re-evaluating M&A in North America.

Nevertheless, Weston emphasized that Centrica will examine each potential transaction on its own merits.

Weston also said that margin compression, which largely has been in the C&I space, got to its "worst" at the end of last year. However, with the polar vortex, suppliers are now pricing more risk into their load following contracts, as Weston noted that pricing from recent auctions have reflected more "sensible" margins.

Weston compared the behavior to the re-pricing of risk seen in 2008.