(Bloomberg) -- Iberdrola SA has agreed to acquire a majority stake in grid operator Electricity North-West, for £2.1 billion ($2.7 billion).
The deal to buy 88% of the company, from a consortium led by Kansai Electric Power Co. Inc, Equitix Ltd and Chinese state-backed CNIC, confirms an earlier Bloomberg report. The value of 100% the company, including debt, is £4.21 billion, Iberdrola said in a statement.
Electricity North West operates a local distribution grid for areas of Britain including Manchester. Grids are regulated, making them desirable investments because of the certainty on returns. Power networks are at the forefront of the electrification drive as it’s these power lines that connect up charging stations for electric cars, heat pumps in homes and local renewable energy plants.
The acquisition makes the UK Iberdrola’s biggest market by regulated asset base, with the valuation set to rise to €14 billion, the company said.
“This transaction reinforces our commitment to investing significantly in electricity networks, which are a critical component for supporting the electrification and decarbonization of the economy,” said Iberdrola Chairman Ignacio Galan.
Iberdrola already operates distribution grids in Britain through its unit Scottish Power. ENW has committed to investing £1.7 billion on upgrading power lines and connecting new projects through 2028.
BNP Paribas SA and Barclays Plc are advising Iberdrola on the transaction while Jefferies Financial Group Inc. are acting on behalf of the shareholders.
(adds advisers in last paragraph.)
©2024 Bloomberg L.P.