French energy company Engie said Wednesday it has agreed to buy UK Power Networks, a leading electricity distribution operator in the UK, for £10.5 billion (approximately $14.2 billion).
The acquisition of 100% of the company marks a "major milestone" in expanding its regulated electricity network operations and will make the UK its second-largest market, the Paris-based company said in a statement.
UK Power Networks distributes about 71 terawatt-hours of electricity each year to 8.5 million customers, it added.
The company employs around 6,500 people and operates three distribution licenses covering London, southeast and eastern England. Its network spans roughly 192,000 kilometers, with about three-quarters of the lines underground.
The company is expected to play a central role in meeting rising electricity demand in the UK and supporting the electrification needed to reach the country's carbon neutrality targets.
Engie said it plans to finance the deal through a combination of debt and hybrid issuances totaling about €5 billion, along with a disposal program of around €4 billion by 2028. It also intends to raise up to €3 billion in equity through an accelerated bookbuilding to maintain a strong investment-grade rating.
The company said it expects to keep enough financial flexibility after the acquisition to fund organic growth, particularly in renewables and networks, while continuing to deliver returns to shareholders without seeking additional equity in the coming years.
Commenting on the deal, Catherine MacGregor, Engie CEO, said: "The acquisition of UKPN represents a decisive step in strengthening ENGIE's position as the best energy transition utility."
MacGregor added that regulated electricity networks are essential for energy security, demand electrification and greater system flexibility.
By Handan Kazanci
Anadolu Agency
energy@aa.com.tr