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PPL selling UK distribution biz to National Grid, acquiring NG’s U.S. asset

PPL selling UK distribution biz to National Grid, acquiring NG’s U.S. asset
(business handshake deal on white background)

Pennsylvania-based PPL is selling its United Kingdom utility business, Western Power Distribution, to the UK-based National Grid plc for close to 8 billion Euros (or $10 billion at current exchange rates). Western Power Distribution comprises four distribution network operators serving 7.9 million customers in central and southwest England and south Wales.

National Grid, meanwhile, is selling its Rhode Island utility, Narragansett Electric, to PPL in a transaction valued at $5.3 billion, including the assumption of approximately $1.5 billion of Narragansett Electric debt. The company plans to use a portion of the proceeds from the sale of WPD to finance the acquisition.

The deals focuses PPL on purely U.S. operations and extend its domestic customer reach by 780,000 customer to 3.5 million overall.

“The strategic transactions we are announcing today immediately unlock value for shareowners and achieve the objectives we set out in launching the process to sell our U.K. utility business,” said Vincent Sorgi, PPL president and CEO. “They will refocus our business mix squarely on strong, rate-regulated U.S. utilities; strengthen our credit metrics; enhance long-term earnings growth and predictability; and provide us with greater financial flexibility to invest in sustainable energy solutions for those we serve.”

The combined company will have a rate base of approximately $22 billion, predominantly comprised of electricity and gas T&D assets. In addition, it will unlock T&D investment opportunities that support growth and deliver value for customers, according to PPL.

“We expect to leverage our proven track record of operational excellence, award-winning customer service, strong reliability and cost efficiency to continue to improve service and deliver energy safely, reliably and affordably to Rhode Island families and businesses,” said Sorgi. “In addition, we’re eager to play a key role in advancing Rhode Island’s decarbonization goals.”

PPL owns seven utility operations in the U.S., including PPL Electric Utilities in Pennsylvania, Louisville Gas & Electric/Kentucky Utilities, and Safari Energy, a solar company.

National Grid US is still owned by the UK-based parent firm.