National Grid has announced plans to buy Western Power Distribution, which operates across the UK’s south west and midlands, from US energy giant PPL Corporation for £7.8bn. WPD is the UK’s largest electricity distribution business.
In a separate transaction, National Grid will also sell its US Rhode Island utility business – The Narragansett Electric Company – to PPL for £2.7bn.
National Grid expects to launch the sale process for its natural gas distribution company, National Grid Gas, in the second half of this year with the aim of completing the sale a year later.
John Pettigrew, CEO of National Grid, commented: “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.
“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.”
The purchase is seen as move by National Grid towards higher growth assets. It expects to find strong interest in National Gas Grid, and intends to sell a majority stake in the business which it believes will play a central role in the transition towards a hydrogen economy.