National Grid is selling a further 20% interest in National Gas, its UK gas transmission and metering business, to a consortium comprising Macquarie Asset Management and British Columbia Investment Management Corporation.
The Macquarie-led consortium which recently completed the acquisition of a 60% stake in National Gas, has agreed to take a further 20% interest on similar financial terms as the earlier transaction, which valued National Gas at an enterprise value of around £9.6bn (€11.2bn).
National Grid said it intends to use total proceeds of approximately £700m from the latest transaction for general corporate purposes, including repayment of debt.
National Grid has also entered into a new option agreement with the consortium to sell its remaining 20% stake in National Gas on similar financial terms.
The consortium can exercise its option between 1 May 2024 and 31 July 2024 to acquire all or part of the remaining interest. If the option for the remaining interest is partially exercised by the consortium, National Grid will have the right to put the remainder of its equity interest in National Gas to the consortium, which can be exercised by National Grid between 1 December 2024 and 31 December 2024.
The disposal plan is in line with National Grid’s previously announced plan to shift its portfolio towards electricity and strengthen its long-term growth prospects.
John Pettigrew, CEO of National Grid, said: “We’re pleased to reach the next milestone in this process, and we’ll continue to work closely with the consortium.”
Martin Bradley, European head of infrastructure for Macquarie Asset Management, said: “This additional investment underlines our commitment to National Gas and the critical role it plays in the UK’s energy system.
“We have been working closely with the National Gas team since January, as they have continued to meet the energy needs of millions of households and businesses. We are pleased to continue our strong relationship with National Grid, and aspire to acquire the remaining interest in due course.”
National Gas has £6.4bn in gross assets and operates the UK’s 7,600km national transmission system, transporting gas to homes, the power industry and electricity generators.
National Gas also provides maintenance and management services for more than 7m domestic, industrial and commercial gas meters across the UK.
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