National Grid gets approval for £7.8bn takeover of electricity distributor
The UK’s Competition and Markets Authority (CMA) has given the green light to the National Grid’s proposed £7.8bn takeover of Western Power Distribution (WPD).
WPD is the UK’s largest electricity distribution business and is currently owned by US firm PPL Corporation.
National Grid, which manages the UK’s power infrastructure, announced the acquisition in March as part of a shift towards electricity and greener energy.
WPD currently distributes electricity to around 7.9 million Britons in the Midlands, South West and Wales, covering an area over 55,500 square kilometres and employing over 6,500 staff. It does not directly sell electricity to end users.
While the firm is estimated to be worth around £14.4bn, it has around £6.6bn in debt that National Grid will also take on. The deal also includes the sale of Rhode Island utility the Narragansett Electric Company (NECO) to PPL for £2.7bn.
According to National Grid, the purchase of WPD will mean its electricity assets will make up around 70 per cent of its portfolio, compared to 60 per cent before.
While the deal had already gone through, the CMA launched an investigation into it in June this year and issued an initial enforcement order that prevented completion of the transaction.
Their action prevented the firms from integrating on a temporary basis and banned the transfer of ownership or control of National Grid, WPD or any of their subsidiaries until the investigation was complete.
National Grid said it was “pleased” the regulator had given the deal the green light.
“When we look at the long term, we believe that the pivot that we are making today will enable us to take a much bigger role in the current energy transition,” National Grid chief executive John Pettigrew told a news briefing when the deal was originally announced in March.
Regulators recently made the decision to strip National Grid of its role running the UK’s electricity system and will appoint a new independent body.
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