National Grid makes £7.8bn swoop for Western Power Distribution
Warwick-based National Grid is set to buy Western Power, the UK’s largest electricity distribution business in a deal worth £7.8bn.
As part of the deal, National Grid will sell The Narragansett Electric Company (NECO) to PPL Emnergy Holdings – a subsidiary of PPL WLD Investments, the holding company of Western Power, in a £2.7bn deal.
In a futher move, National Grid has announces that it will start a process later this year for the sale of a majority stake in National Grid Gas, the owner of the national gas transmission system.
The firm said this will “strategically pivot” its UK portfolio towards electricity.
John Pettigrew, chief executive of National Grid, said: “These transactions will be transformational for our UK portfolio. The acquisition of WPD is a one-off opportunity to acquire a significant scale position in UK electricity distribution. WPD has a high quality, fast growing asset base and an excellent track record of customer satisfaction, operational performance and financial returns. We have received a premium valuation for our Rhode Island business and I am confident that we will also deliver attractive shareholder value from the NGG sale in due course.
“The acquisition of WPD brings great people and outstanding experience to National Grid and I am hugely excited about building the future together. Our vision for National Grid remains unchanged, to be at the heart of a clean, fair and affordable energy future. With increased exposure to the UK’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. We look forward to constructive engagement with Ofgem and policymakers, on how best to achieve these common goals in the best interests of all our customers and wider stakeholders.”