HICL and TRIG propose £5.3bn merger to become UK listed infrastructure giant

HICL Infrastructure (HICL) and The Renewables Infrastructure Group Limited (TRIG) have set out plans to combine their assets to create the UK’s largest listed infrastructure investment company.

The merger would see the voluntary winding up of TRIG, with its assets transferred to HICL in exchange for the issue of new shares and cash.

The trusts said the enlarged group, which would have net assets of more than £5.3bn (€6bn), will pursue a new strategy that will span “the full spectrum of infrastructure, including core and renewables sectors, opening access to new growth assets and subsectors aligned with key infrastructure megatrends”.

The merged entity will target a net asset value (NAV) total return of 10% a year over the medium term and aim for a “progressive” dividend, starting at target of 9p per share.

The trusts said the combined company will have a refreshed investment mandate covering the full spectrum of infrastructure opportunities, reflecting the convergence of traditional core infrastructure sectors such as social, transport and regulated infrastructure, with renewables, storage and digital networks.

Mike Bane, chair of HICL, said: “The combination of HICL and TRIG represents a unique opportunity to capture the key megatrends shaping the infrastructure market today, which increasingly straddle both core infrastructure and the energy transition. By combining two complementary portfolios and teams, the combined company will have the profile, expertise and access to capital to seek enhanced returns from a reinvigorated investment strategy.”

Richard Morse, chair of TRIG, said: “This is a combination that we believe offers a transformational opportunity to drive growth and deliver a resilient, forward-looking investment proposition. Together, HICL and TRIG will form the UK’s largest listed infrastructure and renewables investment company, with the scale, liquidity and balance-sheet strength to better access a broader range of global opportunities and deliver sustainable long-term value for shareholders.”

InfraRed Capital Partners, which acts as investment manager to both HICL and TRIG, will continue in this role for the merged group. In addition, InfraRed’s parent company Sun Life said it will provide £100m of liquidity through secondary market share purchases in the combined company, commencing upon completion of the merger.

“This significant investment further strengthens alignment with shareholders and underlines InfraRed’s commitment to the combined company’s expanded strategy”, the manager said.

Ed Hunt, head of core infrastructure funds at InfraRed, said: “The convergence of traditional core infrastructure and the energy transition continues to accelerate. This transaction ensures that the combined company will be best positioned to capitalise on this significant opportunity, beyond what either could achieve independently.

“The combination of HICL and TRIG, equipped with a refreshed and reinvigorated investment strategy, further enhances the already compelling investment case of these sector leaders. I’m excited about its prospects for delivering value to shareholders, and the substantial investment of Sun Life reflects our confidence in this merged approach.”

The proposed merger is subject to shareholder, regulatory and other approvals, with completion expected by early 2026.

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