France’s Engie strikes deal to buy UK Power Networks for £10.5bn | Utilities

A French utility company has agreed to buy the owner of power cables and power lines in the southeast and east of London, England, in a deal worth £10.5bn.

Paris-based Engie said on Wednesday it had struck a deal to buy UK Power Networks (UKPN), marking a “major milestone” in the company’s ambition to become the “best energy transition organisation”.

Engie will buy the power grid operator, which operates around 122,000 miles of power lines serving 8.5 million customers in London and southern and eastern England, from a Hong Kong-based conglomerate founded by billionaire businessman Li Ka-shing, which has owned UKPN for the past 15 years.

Catherine MacGregor, CEO of Engie, said: “The acquisition of UK Power Networks marks a significant milestone in the execution of our strategic priorities.

“By strengthening our position in electricity networks, it confirms our ambition to become the best energy transition company and will support our growth momentum while improving our risk profile.”

The deal comes almost a year after Britain’s competition watchdog gave Spain’s Iberdrola permission to buy an 88% stake in Electricity North West (ENW) through its UK subsidiary Scottish Power, in a deal that values ​​the network at £5bn. ENW, which serves around 5 million people in the north-west of England, has been rebranded as SP Electricity North West.

Britain’s electricity distribution network companies, which operate power lines and infrastructure across six geographical monopolies, are about halfway through a plan to invest more than £22bn to renew and expand their networks by 2028 under a five-year program approved by the industry regulator.

Investments paid back through energy bills are vital if the UK hopes to connect enough new low-carbon generation, batteries and electric vehicle charging points to help meet its target of reducing fossil fuel use in favor of green electricity.