The UK government is investigating the sale of a majority stake in National Grid PLC (LSE:NG.)’s gas transmission business to an international consortium, as fears grow of an energy crisis this winter.
Ministers will review the deal under new rules brought in this year by the National Security and Investment Act, the Telegraph reported, citing sources familiar with the matter.
The new national security rules came into force at the beginning of the year, ramping up scrutiny on foreign takeovers.
In March, National Grid agreed to sell a 60% interest in its UK gas transmission and metering business to a consortium comprised of Australia-based Macquarie Asset Management and Canadian investor British Columbia Investment Management.
The grid operator said the deal formed part of its “strategic pivot” towards electricity. The proportion of electricity assets in its portfolio were expected to grow from 60% to 70% as a result, helping it deliver on net-zero targets.
National Grid said the deal was due to be completed by the end of 2022. However, the ministerial review is expected to last for 30 days and could be extended by another 45 days.
The transaction valued the gas pipeline and metering business at about £9.6bn. National Grid was due to get £2.2bn in cash and an additional £2bn in debt financing from the sale of the majority stake.
National Grid said in March that it would retain a 40% minority share in the company, which it would rebrand as ‘GasT TopCo’.
It entered into an option agreement to sell the remaining stake in the gas pipeline to the consortium buyers in an additional deal that was expected to take place between January and June next year, on “broadly similar terms”.