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E.ON in talks to sell UK electricity network

Germany energy group E.ON is in talks to sell its electricity distribution network in the UK for up to £3.5 billion, a report has said.

E.ON is believed to be in advanced negotiations with a group of foreign investors over the deal, which could see a change of hands for Britain's second biggest power grid - providing electricity for more than five million homes.

It is thought the bidding consortium comprises sovereign wealth fund the Abu Dhabi Investment Authority, Canadian Pension Plan and Australian Bank Macquarie, according to The Sunday Times.

The E.ON business in the UK is made up of the former Midlands and East Midlands electricity companies. E.ON - formerly known as Powergen in the UK after it took over the utility group - bought the Midlands firms in 2004, rebranding them in April of that year.

A sale of the network would come as the latest in a recent spate of takeovers for UK energy and infrastructure assets. Canadian pension funds last week snapped up the high speed rail line that links London to the Channel Tunnel for £2.1 billion, while EDF recently sold its London electricity network to Hong Kong's richest man, Li Ka-shing, for £5.8 billion.

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