ENGIE SA stated Wednesday it has entered into an settlement to purchase UK Energy Networks (UKPN) at an fairness worth of GBP 10.5 billion ($14.2 billion), a part of the French multinational utility’s efforts to increase its predictable income base.
The acquisition “is a necessary step in rebalancing its [ENGIE’s] infrastructure actions towards regulated electrical energy networks and strengthens its footprint in considered one of its key international locations”, ENGIE stated in a web based assertion, noting the UK would develop into its second-biggest nation of exercise.
The acquisition would increase ENGIE’s service footprint within the UK by 8.5 million houses and companies within the electrical energy distribution sector, based mostly on UKPN’s newest monetary and operational assertion, which lined the yr ended March 2025. This buyer base is roofed by three licenses spanning London, the East of England and the South East of England.
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UKPN has an annual supply of over 71 terawatt hours, or about 28 p.c of Britain’s complete distributed energy, in line with the UKPN monetary assertion. UKPN has a principally underground cable community of greater than 192,000 kilometers (round 119,300 miles), in addition to a workforce of about 6,500 workers, in line with that assertion.
At present ENGIE’s service presence within the UK includes supplying energy and fuel to 17,000 enterprise clients, ENGIE says on its UK web site.
“By this acquisition, ENGIE’s rebalancing is basically achieved in a single transfer, minimizing execution threat and offering sturdy visibility to capital allocation within the upcoming years”, ENGIE stated. “This transaction will improve each ENGIE’s progress profile and its threat profile through the next share of regulated and predictable revenues and money flows.
“It would additionally reinforce ENGIE’s place throughout the electrical energy worth chain, complementing its main roles in upstream renewables and versatile electrical energy and storage, and in downstream power administration and buyer provide”.
ENGIE stated of UKPN, “The corporate has a observe report of excellent operational efficiency (rating primary by the regulator over the 2015-23 interval amongst UK’s DNOs) and one of many highest buyer satisfaction ranges within the sector, inside a secure and clear regulatory framework that gives visibility to traders”.
“UKPN will play a key position in supporting the anticipated progress in electrical energy demand within the UK and assembly the key electrification wants required to attain the nation’s carbon-neutrality ambitions”, ENGIE added.
“UKPN’s RAV [regulatory asset value] amounted to GBP 9.2 billion at end-March 2025 and is anticipated to achieve GBP 10.5 billion on the finish of the present worth management interval in March 2028”.
UKPN had an enterprise worth of GBP 15.8 billion as of March 2025, “corresponding, for the regulated actions, to a a number of of c.1.5x the estimated regulated asset worth as of end-March 2026 and an estimated 2027 EBITDA a number of of c.10x, together with the extra contribution of unregulated property”, ENGIE famous.
UKPN chief govt Basil Scarsella stated, “By becoming a member of ENGIE, we proceed to be a part of a worldwide power chief with the monetary energy, industrial capabilities and long-term imaginative and prescient to assist our subsequent section of growth as UKPN embarks on a interval of serious funding in our community to allow financial progress in London, the South East and East of England”.
ENGIE plans to fund the acquisition via debt and a hybrid share issuance of roughly EUR 5 billion ($5.9 billion). It additionally plans a divestment package deal of round EUR 4 billion, to be accomplished by 2028.
“The Group additionally intends to lift as much as EUR 3 billion fairness via an accelerated guide constructing to assist its long-term dedication to a powerful funding grade score”, ENGIE stated.
“Publish acquisition, ENGIE will retain important flexibility in its capital spend and property portfolio to roll out its natural progress plans notably in renewables and networks and ship strong returns to shareholders, with out additional fairness assist within the subsequent years”.
ENGIE had a liquidity place of EUR 21.6 billion on the finish of 2025, together with EUR 15.3 billion in money, in line with its annual monetary assertion individually printed Wednesday.
“The mixed impact of the acquisition and the anticipated progress of the disposal plan over the yr ought to generate a web enhance of round EUR 17-19 billion of the Group’s capital employed at end-2026. Given the chosen financing preparations, this transaction is anticipated to result in a rise within the Group’s web monetary debt of between EUR 13 and EUR 15 billion by the tip of 2026”, ENGIE stated.
The events anticipate to finish the transaction mid-2026 topic to regulatory approvals. “The transaction can be conditional on approval by the impartial shareholders of the Hong-Kong listed mum or dad firms of the sellers”, ENGIE stated.
ENGIE’s monetary advisors within the transaction are Financial institution of America, BNP Paribas and Rothschild & Co.
To contact the writer, e mail jov.onsat@rigzone.com
