U.S. Markets open in 9 hrs 17 mins

UPDATE 1-UK competition regulator clears National Grid's $11 bln purchase of WPD

  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

(Adds context)

By Pamela Barbaglia

LONDON, Sept 1 (Reuters) - Britain's competition regulator cleared National Grid's proposed acquisition of the United Kingdom's largest electricity distribution business on Wednesday without referring the $11 billion deal to a lengthy investigation.

National Grid agreed in March to buy Western Power Distribution (WPD), which runs grids in the English midlands and southwest regions, as well as Wales, from U.S.-based PPL Corp .

The deal does not merit a so-called Phase 2 investigation, the Competition and Markets Authority (CMA) said, despite initial concerns the merger would result in National Grid and WPD "ceasing to be distinct".

National Grid plays a pivotal role in the UK energy industry, transporting energy from producers to local network operators, who bring gas and electricity into homes and businesses.

Britain in 2019 became the G7 first member to set a net zero target for 2050, which will require wholesale changes in the way Britons travel, heat their homes and consume electricity.

National Grid has said the deal is part of its preparations for a shift away from gas since it boosts the proportion of its assets devoted to electricity.

WPD is Britain's biggest single power network operator but under the country's market structure, it does not sell directly to end users.

WPD's four distribution network operators deliver electricity to about 7.9 million customers and employ more than 6,500 staff. National Grid said it would maintain the WPD headquarters in the western English city of Bristol.

National Grid, whose profits have been hit during the coronavirus pandemic by lower industrial and commercial power consumption, plans to invest about 10 billion pounds in the electricity network over a five-year period.

It is also looking to kick off the sale of a majority stake in National Grid Gas, which owns the national gas transmission system. (Reporting by Pamela Barbaglia; Editing by Louise Heavens and David Clarke)