National Grid Set to Exit UK Gas Distribution

UK energy infrastructure firm National Grid (NGrid) has agreed in principle to divest its last equity stake in British gas distribution. But it will remain Britain's high-pressure gas transmission system operator.

In March 2017 it completed the £3.6bn sale (worth $5bn today) of a 61% stake in its gas distribution business Cadent to Quadgas, the seven-company consortium led by Australia’s Macquarie Infrastructure and Real Assets that also includes Chinese and Qatari sovereign wealth funds CIC and QIA, and Germany's Allianz. 

At the same time, NGrid agreed an option to sell Quadgas a further 14% stake for £0.8bn between March and October 2019.

Now May 1, NGrid has agreed an option to sell the remaining 25% Cadent interest to Quadgas for £1.2bn ($1.65bn) during the same period in 2019, subject to no less than six months' prior written notice.  If both options are exercised by Quadgas, it will own 100% of Cadent, which distributes gas to some 11mn customers, mainly households, and NGrid would no longer have gas distribution interests in the UK.

Quadgas's three other members are UK-based funds Hermes, Dalmore Capital and Amber Infrastructure Limited/International Public Partnerships.