April 1, 2021: The UK National Grid has agreed to buy Western Power Distribution from US firm PPL Holdings for $7.8 billion as it sells Narragansett Electric, a Rhode Island gas network owned by the UK company, to PPL for $3.8 billion, it announced on March 18.
Later this year the National Grid will also begin a process that will culminate in the sale of its majority stake in National Grid Gas plc, which owns the national gas transmission system.
National Grid says the transactions will pivot the portfolio towards electricity; strengthen its long-term outlook with an increased presence in electricity distribution; help achieve the UK’s net zero targets; and generate returns for shareholders, among other things.
The sale means 40% of the National Grid Group’s assets will still be in the US, where it began expanding in 2000 with the acquisition of the New England Electric System and Eastern Utilities Associates. It bought the Rhode Island network in 2006.
The former state-owned company was listed on the London Stock Exchange in December 1995.
Western Power Distribution is based in Bristol, in England’s south west. It is the largest UK electricity distribution business, and is expected to see huge growth because of the energy transition away from fossil fuel burning and towards renewables and storage.
In August 2020 PPL announced plans to sell WPD, which is made up of four distribution network operators serving nearly eight million customers in central and southwest England and south Wales.
“These transactions will be transformational for our UK portfolio,” said National Grid CEO John Pettigrew. “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 National Grid, we’ve found a respected partner that has a long track record of strong operations in the UK, is eager to build on WPD’s success, is focused on advancing UK decarbonization initiatives and shares a strong commitment to employees, customers and the communities we serve in the UK,” said PPL president and CEO Vincent Sorgi.