French utility firm Engie has announced it will buy the British electricity distributor, UK Power Networks, for €10.5 billion as part of its strategy to weather variations in the energy market due to geopolitics.
Engie announced the acquisition during an earnings call, when it revised its outlook for the coming years upward.
The company, which produces and distributes gas and electricity, said in a statement that the acquisition of UK Power Networks "is an essential step in rebalancing its infrastructure activities toward regulated electricity networks".
It is looking to power distributors to buffer its business from fluctuations in the energy market caused by geopolitics.
Engie lost a major source of gas supply from Gazprom following Russia’s invasion of Ukraine in 2022, and US President Donald Trump last year froze three early-stage offshore wind projects in the United States.
Regulated assets like power distribution networks earn fixed fees based on the amount of electricity transported, and European consumption is set to rise as countries are increasingly encouraging their transportation and industrial sectors to electrify.
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UK Power Networks operates 192,000 kilometres of power lines serving 8.5 million customers across London and the southeast and eastern parts of England.
Engie will buy the distributor from CK Infrastructure Holdings, a Hong Kong-based energy investment group. The deal is expected to close in the middle of this year, subject to regulatory approvals.
The acquisition will make the UK the company’s second-largest country of activity, after France.
(with Reuters)
