National Grid PLC (LSE:NG.) (National Grid PLC (LSE:NG.)) has announced plans to sell 60% of its gas transmission business to a group of investors including Australia’s Macquarie Asset Management.
The deal, which values the unit, NGG, at about £9.6bn, comes as part of National Grid’s strategic shift towards electricity and the delivery of net-zero greenhouse gas targets and follows the sale of other assets.
The move “makes sense as electricity as a share of energy is only going to go up” and it fits in with the company’s current strategy, said Alan Beaney, investment director at RC Brown.
National Grid also has the option to sell the remaining 40% to the consortium, which also includes Canada’s British Columbia Investment.
The deal provides the investors with oversight of a 7,660km gas transmission system to UK homes and the power industry.
Macquarie already has interests in Cadent, which runs gas distribution networks in the UK.
“The consortium has a long-term commitment to the UK with significant experience in owning and operating infrastructure assets,” said John Pettigrew, chief executive at National Grid.
The company aims to use £4.2bn of sale proceeds to repay a bridge financing facing drawn as part of the acquisition of electricity distribution business Western Power Distribution.
National Grid’s shares rose 0.5% on Monday, in line with the advance of the FTSE 100 index.