France’s Engie to Buy UK Power Networks for £10.5 Billion

Article content(Bloomberg) — Engie SA agreed to buy the UK’s largest power-distribution network for £10.5 billion ($14.2 billion), expanding its footprint in Britain just as the nation rushes to expand its grid to meet surging demand from renewables, electric vehicles and data centers.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe French utility will acquire UK Power Networks from Hong Kong billionaire Victor Li’s CK Group, gaining control of a regulated asset that serves about 8.5 million customers in London and southeast England. The transaction, expected to close in mid-2026, will make the UK Engie’s second-largest earnings contributor after France as the company pushes to diversify beyond domestic gas networks. Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentPower grids worldwide are rolling out huge investment programs to connect wind and solar projects while accommodating new electricity-intensive demand from artificial intelligence, electrified transport and heat pumps. In the UK, distribution networks, which carry power from high-voltage transmission systems to homes and businesses, are key to that expansion.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentEngie said it will finance the acquisition with roughly €5 billion ($5.9 billion) of debt and hybrid securities and €4 billion from asset disposals. It also plans to raise as much as €3 billion in equity through an accelerated bookbuild to preserve its investment-grade credit rating.Article contentAcross Europe, network constraints are emerging as a key friction point in the push to electrify and decarbonize the economy. Regulated grid assets offer stable, inflation-linked returns, making them particularly attractive to long-term infrastructure investors.Article contentThe deal underscores Engie’s strategy of shifting toward regulated infrastructure and long-term contracted renewables as it reduces exposure to more volatile fossil fuel-linked activities. It’s expected to boost net recurring income to within the range of €4.6 billion to €5.2 billion in 2026, €400 million higher than previously forecast, and to as much as €5.8 billion in 2028, Engie said. Article contentArticle contentBritain aims to decarbonize its power system by 2030, one of the most ambitious targets in Europe. At the same time, developers face mounting delays in securing grid connections. Data centers alone are adding enormous pressure: a single 100-megawatt facility can consume as much electricity as 260,000 homes, according to Aurora Energy Research Ltd.Article contentGrid assets sales are rare.

Western Power Distribution was bought by National Grid Plc in 2021 for £7.8 billion pounds, then the UK’s largest utility transaction in at least a decade.Article contentCK Group has explored a sale of its UK distribution business for at least four years. In 2022, it held talks with a consortium led by Macquarie Group Ltd. and KKR & Co.Article contentUK Power Networks is owned by CK Infrastructure Holdings Ltd. and Power Assets Holdings Ltd., which each hold 40%, with CK Asset Holdings Ltd. owning the remaining 20%, according to the company’s website.Article contentSeparately, Engie reported a 12% drop in net recurring income to €4.9 billion after shutting three nuclear reactors in Belgium and dealing with lower French hydropower output and weaker power prices. The company proposed a dividend of €1.35 per share, down from €1.48 a year earlier.Article contentArticle contentArticle content(Updates with detail throughout.)Article contentTrending Canada's housing market suffers largest price decline among major economies, says BIS Real Estate Australia ships LNG 25,000 kilometres to Eastern Canada amid Asian slump Oil & Gas B.C. widow worried about retirement income with OAS clawbacks Family Finance Trump summons Amazon, Google, Meta to sign power-cost pledge Energy Posthaste: Canadian dollar is facing a big risk that markets seem to be overlooking News Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Canada's housing market suffers largest price decline among major economies, says BIS Real Estate Australia ships LNG 25,000 kilometres to Eastern Canada amid Asian slump Oil & Gas B.C. widow worried about retirement income with OAS clawbacks Family Finance Trump summons Amazon, Google, Meta to sign power-cost pledge Energy Posthaste: Canadian dollar is facing a big risk that markets seem to be overlooking News