ScottishPower axes executives as E.On makes £10bn bid

ScottishPower has dismissed the man regarded as its next chief executive in a corporate restructuring announced shortly after German utility E.On declared a potential £10bn takeover bid.

The firm, Britain’s fifth-biggest energy group, announced that four key executives, including two on the main board, were to leave “with immediate effect”. This forms part of an internal reform that is hoped to save £60m annually and will probably involve heavy job cuts in the corporate and back-office ranks of the 6,000-plus work force.

The infrastructure director, David Nish, was the City’s favourite to succeed Ian Russell as chief executive of ScottishPower. He and the executive director of ScottishPower’s UK business, Charles Berry, were among the casualties.

Russell said the job losses were due to the imminent disposal of PacifiCorp and were agreed by board members on Monday. These cuts would have been arranged at the same time E.On was preparing its Monday night statement to the stock market, in which it revealed its takeover intentions.

ScottishPower is selling US group PacifiCorp to energy firm MidAmerican at a £927m loss and disposing of Southern Water at another big loss. Critics say the firm’s mistake was to venture into the American market and experiment with the multi-utility strategy.

E.On, which already owns Powergen, said any offer for ScottishPower would be made entirely in cash.