The Competition and Market Authority (CMA) has approved National Grid’s £7.8bn deal to buy the UK’s largest electricity distribution business, Bristol-based Western Power Distribution (WPD).
The CMA said it had decided not to refer the group’s acquisition of WPD from US energy giant PPL Corporation, announced in March, for an in-depth investigation.
National Grid, which manages the UK’s power infrastructure, has bought WPD - which covers the South West, South Wales and Midlands - as part of plans to pivot its focus towards electricity and greener energy.
At the time the WPD deal was announced, National Grid also said it would also look to sell off its stake in National Grid Gas, the UK’s national gas transmission system, in the second half of this year and complete the sale approximately a year later.
The moves will increase the proportion of electricity assets in the group's portfolio from around 60% to about 70%.
The CMA had launched a merger inquiry into the WPD acquisition in June, though the deal had already gone through.
National Grid said it was “pleased” the regulator had given the deal the green light.
It will update investors and analysts on plans for WPD, alongside the wider group, at a capital markets day event on November 18.
National Grid previously said its purchase of WPF would strengthen its long term business outlook, as it anticipates a high level of electricity assets growth as a result of ongoing energy transition, with gas boilers being phased out electric cars becoming more popular.
According to Government projections, around 27% of the UK’s energy needs will be met by electricity or renewables by 2035, compared to 23% in 2018.
WPD services around eight million customers across its distribution area, which spans 55,300 sq km from Cornwall in the west to Lincolnshire in the east.
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