THE company which took over Northern Electric was yesterday thought to be finalising its £3bn takeover by German utility RWE.

Swindon-based Innogy confirmed last month that it was the subject of takeover interest, but did not disclose who the talks were with.

However, it is expected that the reported takeover by RWE - which already owns Thames Water - could be confirmed later this week.

Shareholders are likely to receive between 270p and 275p, a premium of at least 24p on Friday's closing price.

Through the purchase of Northern Electric and Yorkshire Power's domestic supply businesses, Innogy has raised its customer base to more than seven million.

It was created in October 2000 when National Power split its domestic and international operations.

Continental interest in the UK's energy sector has been strong in recent months, with German company EON due to complete a £9.6bn takeover of Innogy's rival Powergen, next month.

Electricite de France also bought London Electricity, which has a call centre in Sunderland, in 1998.

As well as the prospect of geographical expansion, continental firms are attracted to the UK because the market is more open to competition.

Previous reports of an RWE takeover at the end of last year were denied by Innogy chief executive Brian Count, who said the firm's then £2.9bn offer undervalued it.

No one from Northern Electric was available for comment last night.