Two of the first companies in Britain to establish commercial-scale anaerobic digestion facilities using municipal waste to generate electricity have merged.

Bedfordshire company Biogen, part of the agriculture and property group Bedfordia, has acquired the Shropshire firm Greenfinch Ltd, in a move the companies said would change the face of the UK's anaerobic digestion industry "significantly".

The combined company, to be called BiogenGreenfinch, will aim to provide anaerobic digestion systems for the agriculture, food, waste and water industries as well as to the local authority sector. The anaerobic digestion technology involves organic materials being broken down by bacteria within huge tanks. The bacteria produce a biogas that can be burned to generate electricity, or stored for use directly as a methane-based fuel. The process also produces a solid or liquid residue that is seen as a valuable fertiliser for agriculture.

The two companies Biogen and Greenfinch have been involve in the development of 12 plants in the UK so far, including Greenfinch's pioneering Ludlow facility, which was part of the government's New Technologies Demonstration Programme. Biogen has a large anaerobic digester at its home base in Milton Ernest, Bedfordshire, and is developing another just to the north in Northamptonshire that could be operational in Spring 2009. The plants are designed to generate around 1.5MW of power from 45,000 tonnes of food waste.

The company's parent Bedfordia has invested £18 million to develop the combined business with Greenfinch, which will see 43 staff.