This Nation's National Grid No More

Ben Chapman writes:

National Grid has agreed to sell a majority stake in the UK’s gas pipe network to a team of investors, including the Chinese and Qatari states.

The UK's power network operator confirmed it is offloading the 61 per cent shareholding to a consortium led by Australian investment bank Macquarie in a deal that values the unit at around £13.8bn.

The division controls an important part of the country's infrastructure, which delivers gas to 11 million homes through 82,000 miles of pipeline, and its sale will reignite concerns about the ownership of critical national assets by foreign investors. 

In August Theresa May said such deals would face tighter regulation as she gave the green light to the French and Chinese-funded Hinkley Point nuclear reactor. 

National Grid said it would distribute a £150m voluntary payment to benefit British energy customers, while some £4bn of the proceeds will be returned to the company’s shareholders.

It will keep 31 per cent of the business but said it could potentially sell another 14 per cent stake to the consortium under the terms of the deal.

The sale, which is set to complete before the end of March next year, comes as part of a move to rebalance National Grid's business towards higher growth areas and create extra value for shareholders.

Dave Prentis, Unison union general secretary, said:

“The experience of Thames Water customers when Macquarie was running the show should have been a red flag to ministers and regulators as how unsuitable this company is to be in charge of the UK's gas supply. 

“Macquarie has poor form already – in building up huge company debt, repatriating massive dividends to the southern hemisphere and charging customers more for a much poorer service.

“The company has already proved it can’t be trusted with the nation’s water supply, but now it is to be in charge of gas pipes to millions of homes and businesses.

“The Government has said it wants to invest in UK infrastructure, yet these are not terribly encouraging first steps.

“It suggests ministers have not given much thought to an industrial strategy, not do they seem to have much desire to retain key parts of the nation’s infrastructure in UK hands.” 

John Pettigrew, chief executive of National Grid, said the deal “represents an important milestone in the evolution of National Grid and is a good outcome for our customers, employees, and shareholders”.