Linklaters advises as National Grid agrees UK distribution sale

Linklaters has advised National Grid plc (“National Grid”) as it today enters into an agreement to sell a 61% equity interest in its UK gas distribution business (“NGGD”) to a consortium of long-term infrastructure investors. The Consortium comprises Macquarie Infrastructure and Real Assets (“MIRA”), Allianz Capital Partners, Hermes Investment Management, CIC Capital Corporation, Qatar Investment Authority, Dalmore Capital and Amber Infrastructure Limited/International Public Partnerships.

The terms of the Transaction imply an enterprise value for NGGD of approximately £13.8 billion. In consideration for the sale of its equity interest, on completion National Grid will receive a payment of £3.6 billion in cash from the Consortium (subject to certain completion adjustments) and will own a 39% minority equity interest in a new holding company for NGGD (“GasD HoldCo”). In addition, National Grid will receive £1.8 billion from additional debt financing.

Following completion of the Transaction, National Grid intends to return £4 billion of net proceeds to shareholders through the combination of a special dividend (together with a share consolidation) and share buy-backs.

Completion of the Transaction is conditional on the receipt of merger clearance from the European Commission. Subject to satisfaction of this condition, National Grid expects that the Transaction will complete on or prior to 31 March 2017.

Roger Barron, Corporate partner at Linklaters, says: “This is a significant deal for the market and a good outcome for National Grid and its stakeholders. The deal also shows the confidence that investors, from around the world, have in UK infrastructure.  Despite increased political risk, institutional international investors still view UK assets as attractive and this is likely to continue.”

The Linklaters team was led by Corporate partners Roger Barron and Jessamy Gallagher and included managing associate Charles Turner.

ENDS

Notes to Editors

For more information, contact Surinder Sian on +44 207 456 4842

Linklaters LLP is a leading global law firm, supporting clients in achieving their strategies wherever they do business. We use our expertise and resources to help clients pursue opportunities and manage risk across emerging and developed markets around the world. Linklaters is a recognised market leader for advice on public takeovers, cross-border and multi-jurisdictional mergers and acquisitions, joint ventures, disposal and other corporate advisory matters and capital markets issues. Our clients are drawn from a broad base including the FTSE 100, Fortune 500, DAX 30, CAC 40 corporates, private equity houses, investment banks and governments.