National Grid agrees £14bn gas distribution sale

MIDLANDS utility National Grid is to sell a 61% stake – worth almost £14bn – in its UK gas distribution business to a consortium of long-term infrastructure investors.

The deal will mean a £4bn windfall for shareholders.

The consortium comprises Macquarie Infrastructure and Real Assets, Allianz Capital Partners, Hermes Investment Management, CIC Capital Corporation, Qatar Investment Authority, Dalmore Capital and Amber Infrastructure Limited/International Public Partnerships.
 
The deal values the distribution business – NGGD – at approximately £13.8bn. National Grid will receive a payment of £3.6bn in cash from the consortium and will own a 39% minority equity interest in a new holding company for NGGD. In addition, National Grid will receive £1.8bn from additional debt financing.
 
Following completion of the deal, National Grid will return £4bn to shareholders through the combination of a special dividend (together with a share consolidation) and share buy-backs. At least 75% of the net proceeds are expected to be returned via a special dividend in Q2 of 2017.