Aggregator firms secure commitments from businesses to reduce power usage. They then sell the power reduction they secure to the network operator. Aggregators pass on the revenue to the businesses, taking a cut.

REstore manages 1.7 gigawatts of peak electricity load from industrial and commercial customers across Belgium, Britain, France and Germany.

Centrica said the business will form part of its international distributed energy and power unit which provides energy solutions to large energy users.

"This acquisition is an important step forward in the delivery of our strategy, expanding on our offer to business customers to help them take control of their energy and gain competitive advantage," Jorge Pikunic, managing director of Centrica Distributed Energy & Power, said in a statement.

Demand-side response is expected to be a significant growth opportunity as electricity markets evolve, Centrica said.

The acquisition will also further expand Centrica's geographic footprint into new European markets, it added.

Smaller aggregators have gained traction in the British market after National Grid launched a campaign to raise awareness among businesses about the commercial benefits of demand-side response and reducing energy usage.

Big power firms like Centrica were being undercut by these newcomers and losing business in Britain's 1-billion pound ($1.3 billion) electricity balancing market.

($1 = 0.8582 euros)

($1 = 0.7659 pounds)

(Reporting by Nina Chestney; editing by Alexander Smith)