London, 19 July 2023
A consortium led by Macquarie Asset Management (the “Consortium”) has entered into an agreement with National Grid to acquire a further 20 per cent equity interest (the “Further Interest”) in National Gas.
The investment takes the Consortium’s total ownership in National Gas to 80 per cent and is on equivalent financial terms to the original 60 per cent acquisition, which was completed in January 2023. Completion of the Further Interest is subject to a regulatory condition but subject to such clearance, it is expected to complete in the second half of calendar year 2023.
The Consortium has now entered into a new option agreement with National Grid for the potential acquisition of the remaining 20 per cent shareholding in National Gas (the “Remaining Interest”). The Consortium has the option, exercisable between 1 May 2024 and 31 July 2024, to acquire all or part of the Remaining Interest. If the option for the Remaining Interest is partially exercised by the Consortium, National Grid will have the right to put the remainder of its equity interest in National Gas to the Consortium, which can be exercised by National Grid between 1 December 2024 and 31 December 2024.
If one or both of these options are exercised, the consideration for the Remaining Interest is expected to be paid in cash to National Grid on equivalent terms to the original transaction, subject to certain adjustments.
Martin Bradley, European Head of Infrastructure for Macquarie Asset Management, said: “This additional investment underlines our commitment to National Gas and the critical role it plays in the UK’s energy system. We have been working closely with the National Gas team since January as they have continued to meet the energy needs of millions of households and businesses. We are pleased to continue our strong relationship with National Grid, and aspire to acquire the Remaining Interest in due course.”
National Gas became an independent company earlier this year following the completion of the Consortium’s initial investment in January 2023. Since then, National Gas has maintained a safe, reliable and affordable supply with a 100 per cent network reliability rating and secured initial funding to develop a national hydrogen backbone network.
National Gas operates the UK’s 7,600 kilometre national transmission system, transporting the gas needed to heat homes and power industry and electricity generation. National Gas also provides maintenance and management services for over 7 million domestic, industrial and commercial gas meters across the UK.