National Grid to Buy Largest UK Power Distribution Company for $10.89 Billion -- Update
18 March 2021 - 8:24PM
Dow Jones News
--National Grid is to acquire Western Power Distribution for
$10.89 Bln
--The deal with U.S. owner PPL also includes the sale of a Rhode
Island utility for $3.8 billion
--National Grid plans to sell a majority stake in the U.K. gas
transmission system as it pivots toward electricity
By Jaime Llinares Taboada
National Grid PLC said Thursday that it has agreed to acquire
Western Power Distribution and sell the Narragansett Electric Co.
in a deal with PPL Corp., and that it plans to sell a majority
stake in the British gas transmission system.
The FTSE 100 energy networks company said WPD, the largest U.K.
electricity distribution business, is being acquired from PPL for
an equity value of 7.8 billion pounds ($10.89 billion). WPD owns
four distribution networks in the U.K., delivering power to around
7.9 million customers.
Meanwhile, the Narragansett Electric Co., a Rhode Island
utility, is being sold to PPL for an equity value of $3.8 billion,
it said.
In addition, National Grid said it will start a process later in
2021 to sell a majority stake in National Grid Gas PLC, the owner
of the British gas transmission system. This business had
contributed adjusted operating profit of GBP348 million to the
group's total of GBP3.31 billion in the year to March 31, 2020.
National Grid said that as a result of these transactions, the
proportion of its assets in electricity will increase to around 70%
from 60%.
"These transactions will be transformational for our U.K.
portfolio. The acquisition of WPD is a one-off opportunity to
acquire a significant scale position in U.K. electricity
distribution," Chief Executive John Pettigrew said.
"With increased exposure to the U.K.'s electricity sector, these
transactions enhance our role in the progress towards net zero,
underpinning our core ambition which is to enable the energy
transition for all," he said.
National Grid will fund the acquisition of WPD with a GBP8.25
billion bridge financing facility. This will be repaid with the
proceeds from the NECO and NGG sales and the issue of new senior
debt and hybrid capital securities, the company said.
The acquisition of WPD is expected to close in four months and
the sale of NECO is expected to occur by the first quarter of 2022.
As for NGG, the group is targeting to launch the sale process in
the second half of 2021 and complete it a year later.
Shares at 0853 GMT were down 22.4 pence, or 2.7%, at 809.0
pence.
Write to Jaime Llinares Taboada at jaime.llinares@wsj.com;
@JaimeLlinaresT
(END) Dow Jones Newswires
March 18, 2021 05:09 ET (09:09 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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