National Grid as sold a majority stake in its gas grid to a group of global investors as it raises money to invest in electricity.
The FTSE 100 business said it would pocket £2.2bn in cash for 60% of its gas transmission and metering unit.
The consortium of buyers includes Australian Bank Macquarie Asset Management and Canada's British Columbia Investment Management Corporation (BCI).
It is a significant deal for National Grid, which has for decades been responsible for the pipes that funnel gas into UK homes.
“Today’s announcement is a strong result for all our stakeholders, including employees and customers,” said chief executive John Pettigrew.
Mr Pettigrew said the new owners had "lots of experience" owning big infrastructure and a “long-term commitment to the UK”.
“I look forward to our partnership and continuing to deliver safe and reliable gas service at the least cost to consumers,” he said.
For National Grid this helps the business pivot towards electricity – where it sees its future. Even before it invests the money it gains from the sale, just the disposal alone takes its assets invested in electricity from 60% to 70%.
“This transaction further enhances our role in delivering the UK’s energy transition, pivots our portfolio towards electricity, whilst ensuring the security of the energy supply for the country,” Mr Pettigrew added.
“Alongside our plans to invest up to £35 billion in energy infrastructure over the next five years, the series of transactions announced last March will strengthen our long-term growth prospects, and drive long-term value for shareholders.”
Macquarie’s Martin Bradley said: “The national transmission system is a critical enabler of the UK’s energy transition, providing the flexibility and reserve energy needed in the electricity system as the deployment of renewable sources of generation accelerates.
“However, if the UK’s net-zero by 2050 target is to be met, the country must have a next-generation transmission backbone to power homes and businesses with renewable energy. Backed by our significant investment, the transmission system will play a leading role in making the network ready for this transition.
“In doing so it will support the expansion of hydrogen’s role in the energy mix to deliver a competitive edge to the UK and its industry, while working closely with the Government and Ofgem to maintain security of supply.”
Like this story? Why not sign up to get the latest business news straight to your inbox.
