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Watchdog green lights €16bn sale of UK gas network

Watchdog green lights €16bn sale of UK gas network

The European Commission has cleared the sale of a 61% stake in National Grid’s gas distribution network to a consortium of infrastructure investors, the FTSE 100-listed company said.

In December, a consortium of infrastructure investors, including the sovereign wealth funds of China and Qatar, entered into an agreement with the UK’s National Grid to buy a 61% stake in its gas distribution network. Worth €15.9 billion, it was the largest infrastructure deal in the world in 2016, according to data provider Preqin.

After receiving regulatory approval from the European Commission on 16 March, National Grid said it expected the transaction to complete on 31 March 2017.

The consortium comprises Macquarie Infrastructure and Real Assets, Allianz Capital Partners, Hermes Investment Management, CIC Capital Corporation, Qatar Investment Authority, Dalmore Capital, and Amber Infrastructure Limited/International Public Partnerships.

Among the members of the consortium, MIRA will have the largest stake in the National Grid Gas Distribution at 14.5%. CIC Capital will own 10.5%, Allianz Capital Partners 10.2%, while Hermes and Qatar Investment Authority will have 8.5% each.

National Grid Gas Distribution covers the east of England, north London, north west and west Midlands, and distributes gas to approximately half of the country’s connected households through 130,000km of gas pipelines.

In an interview with Modern Investor, Hermes IM’s head of infrastructure explained why the deal offered ‘an excellent fit’ with their core investment strategy.

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