National Grid has agreed to sell 61% stake in its gas division to a group of investors.
Quad Gas Group, a consortium of long term infrastructure investors, has agreed a deal with the grid operator valuing the division at around £13.8bn.
The group consists of seven investment firms including Macquarie Infrastructure and Real Assets, Allianz Capital Partners and Hermes Investment Management. They will have stakes in four of the eight distribution networks that deliver gas to 11 million customers.
National Grid will receive £3.6 billion for the stake in its gas arm and a further £1.8 billion in debt financing.
It will own the remaining 39% of the gas business and return £4 billion to shareholders after the deal is completed in the first quarter of 2017.
Earlier this year, GMB union urged the government to stop the sale of National Grid’s gas infrastructure.
John Pettigrew, Chief Executive of National Grid said: “Today’s announcement follows a highly competitive sale process. It represents an important milestone in the evolution of National Grid and is a good outcome for our customers, employees and shareholders. The Consortium has a long term commitment to the UK with significant experience in owning infrastructure assets and we look forward to working with them as the gas distribution business continues to deliver a safe and reliable service.
“On completion, National Grid’s portfolio will be rebalanced towards higher growth assets, whilst maintaining a strong balance sheet and supporting our sustainable dividend policy.”