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Bloomberg
National Grid Plc agreed to sell 60% of its gas transmission business to a consortium including Macquarie Group Ltd in a deal that will value the asset at 9.6 billion pounds ($12.7 billion).
The UK firm will get about 2.2 billion pounds in cash from Macquarie’s asset management arm and British
Columbia Investment Management Corp (BCI), it said in a statement on its website. The UK company will also receive 2 billion pounds from additional debt financing when the deal’s completed, according to the statement.
National Grid announced its intention to sell the holding last year as it transitions to a low-carbon future. Under the new ownership structure, the London-based company will hold a 40% stake in NGG via a holding company called GasT TopCo. It has an option to sell that stake to the consortium in the first half of next year on broadly similar terms.
The sale comes as fossil fuel businesses are coming under scrutiny from investors and activists, forcing companies like National Grid to reassess and reduce their exposure to dirty forms of energy. National Grid’s gas transmission business is one of the largest in the UK and includes a 7,000-kilometre pipe network across the country. Under CEO John Pettigrew, the London-listed utility is working to cut its greenhouse gas emissions to net zero by 2050. As part of this push, the company agreed to buy PPL Corp’s UK electricity business, Western Power Distribution, for 7.8 billion pounds.
Macquarie has been eyeing other UK power assets and is leading a consortium with KKR & Co that’s in advanced talks to buy the UK electricity distribution business controlled by Hong Kong tycoon Victor Li, people familiar with matter said.