National Grid plc ("National Grid" and together with its subsidiary undertakings, the "Group") today announces that it has agreed to acquire PPL WPD Investments Limited (together with its subsidiary undertakings, the ("WPD Group")), the holding company of Western Power Distribution ("WPD"), the UK's largest electricity distribution business, from PPL WPD Limited, a subsidiary of PPL Corporation ("PPL") (the "WPD Acquisition") for an equity value of £7.8 billion and National Grid has agreed to sell The Narragansett Electric Company ("NECO") to PPL Energy Holdings, LLC, also a subsidiary of PPL, for an equity value of US$3.8 billion (£2.7 billion) (the "NECO Sale", and together with the WPD Acquisition, the "Transactions").
In addition, National Grid announces that it will commence a process later this year for the sale of a majority stake in National Grid Gas plc, the owner of the national gas transmission system ("NGG") (the "NGG Sale").
Together these transactions will:
Completion of the WPD Acquisition, which will be funded by fully committed bridge facilities, is expected to occur within the next four months and completion of the NECO Sale is expected to occur before the end of the first quarter of 2022. National Grid expects to launch the sale process for NGG in the second half of this year and complete the sale approximately a year later.
John Pettigrew, Chief Executive of National Grid, said: "These transactions will be transformational for our UK portfolio. The acquisition of WPD is a one-off opportunity to acquire a significant scale position in UK electricity distribution. WPD has a high quality, fast growing asset base and an excellent track record of customer satisfaction, operational performance and financial returns. We have received a premium valuation for our Rhode Island business and I am confident that we will also deliver attractive shareholder value from the NGG Sale in due course.
“In combination with the continued successful execution of our strategy in the US, establishing National Grid as the leading electricity transmission and distribution operator in the UK will strengthen our long-term growth prospects, enhance our role in the UK's energy transition and drive long term shareholder value. Following the completion of these transactions, we will continue to have a diversified portfolio of assets across the UK and US, with a strong asset growth profile that will further underpin our dividend policy for the longer term.
“I'd like to take this opportunity to say a heartfelt thank you from all of us at National Grid to all the fantastic Rhode Island colleagues who have worked so hard over the years to deliver the energy needs for our customers across Rhode Island. I know that PPL will be an excellent steward for both NECO's customers and colleagues.
“As we move our portfolio to higher growth assets, we have taken the decision to sell a majority stake in NGG. Given the strategic nature of its business coupled with its central position in a transition towards a hydrogen economy, it will continue to play a vital role in the UK's energy system. We expect strong interest when the sale process begins, likely to be in the second half of this year.
“The acquisition of WPD brings great people and outstanding experience to National Grid and I am hugely excited about building the future together. Our vision for National Grid remains unchanged, to be at the heart of a clean, fair and affordable energy future. With increased exposure to the UK's electricity sector, these transactions enhance our role in the progress towards net zero, underpinning our core ambition which is to enable the energy transition for all. We look forward to constructive engagement with Ofgem and policymakers, on how best to achieve these common goals in the best interests of all our customers and wider stakeholders."
The WPD Acquisition is a Class 1 transaction under the Listing Rules and is therefore conditional upon the approval of shareholders at a General Meeting. Accordingly, National Grid will shortly publish a shareholder circular containing further details of the WPD Acquisition, a recommendation from its board of directors (the "Board"), and the notice of the General Meeting which is expected to be held by the end of April 2021. In addition, the Transactions are conditional on certain regulatory approvals and the NECO Sale is conditional on completion of the WPD Acquisition occurring.
For the full RNS, please see here.
For more information, please contact:
Molly Neal: +44 (0) 7583 102 727
Surinder Sian: +44 (0) 7812 485 153
Teneo (Financial PR Advisor to National Grid)
Charles Armitstead: +44 (0) 7703 330 269