Utility giant Scottish & Southern Energy plc (SSE) is to buy an environmentally-friendly energy company in a deal worth tens of millions of pounds.

SSE will add Slough Heat & Power to its portfolio after agreeing a £49 million deal to buy property investor SEGRO’s shares in the company.

The deal will strengthen SSE’s renewable energy operations and is being made as part of its strategy to build up its sustainable energy business.

SEGRO’s chief executive, Ian Coull, said the company sold its shares in the business as part of a plan to focus on its European property interests by disposing of its non-core operations.

Contracts have been exchanged and completion is expected by the end of December 2007, if contractual conditions are met.

SEGRO, which sold its US operations in August, is being advised on the Slough Heat & Power transaction by KPMG Corporate Finance and law firm Nabarro.