National Grid Acquires Western Power

In a press release on March 18th National Grid announced:

National Grid plc today announces that it has agreed to acquire PPL WPD Investments Limited, the holding company of Western Power Distribution (WPD), the UK’s largest electricity distribution business, from PPL WPD Limited, a subsidiary of PPL Corporation for an equity value of £7.8 billion and National Grid has agreed to sell The Narragansett Electric Company (NECO) to PPL Energy Holdings, LLC, also a subsidiary of PPL, for an equity value of US$3.8 billion (£2.7 billion).

In addition, National Grid announces that it will commence a process later this year for the sale of a majority stake in National Grid Gas plc, the owner of the national gas transmission system.

As is the way with such things, this is not all signed, sealed and delivered just yet:

Completion of the WPD Acquisition, which will be funded by fully committed bridge facilities, is expected to occur within the next four months and completion of the NECO Sale is expected to occur before the end of the first quarter of 2022. National Grid expects to launch the sale process for NGG in the second half of this year and complete the sale approximately a year later.

The Chief Executive of National Grid, John Pettigrew , commented that:

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 WPD Acquisition is a Class 1 transaction under the Listing Rules and is therefore conditional upon the approval of shareholders at a General Meeting. Accordingly, National Grid will shortly publish a shareholder circular containing further details of the WPD Acquisition, a recommendation from its board of directors, and the notice of the General Meeting which is expected to be held by the end of April 2021. In addition, the Transactions are conditional on certain regulatory approvals and the NECO Sale is conditional on completion of the WPD Acquisition occurring.

It will make a nice change to ultimately (or should that read hopefully?) have our local electricity distribution company here in North Cornwall owned by a Great British electricity company rather than an American one! It’s also interesting that (presumably?) National Grid think there’s money to be made in electricity distribution as well as in transmission.

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