The UK government will consider a £4.2 billion foreign takeover of a key part of the country’s gas infrastructure amid growing concerns about energy security.
The sale of a 60% stake in National Grid’s gas transmission business to an international consortium led by Australia’s Macquarie, the world’s largest infrastructure investor, will be reviewed under the Security Act. Country and Investment.
The intervention comes as the war in Ukraine and soaring fuel prices have focused attention on who controls energy infrastructure and supplies.
The NSI Act, which went into effect earlier this year, significantly expanded the government’s power to scrutinize purchases of foreign companies in 17 sensitive sectors of the economy, including energy, defence, transportation, data and communication infrastructure.
Spokesperson for National border indicates that the review process was predictable.
In its annual report, the FTSE 100 company said the sale was subject to “several regulatory and antitrust conditions” and was expected to close in the second half of 2022.
The National Grid Agreement which means the Macquarie-led consortium will undertake 7,660 km of pipelines to transport gas to heat homes and the energy and power industry across the UK.
The group said the deal is subject to “a range of competition and regulatory approvals” including review under the NSI Act. “We are working with the relevant authorities to proceed with these approvals,” it said.
Macquarie has been a significant investor in the UK, having spent around £50 billion on UK utility infrastructure over the past 15 years.
In 2017, it acquired half of the UK’s eight local gas distribution networks from National Grid for £5.4 billion, in a consortium of investors including property funds sovereignty of Qatar and China.
National Grid, which controls the national electricity transmission network in the UK, has been looking to shift its business away from fossil fuels towards a lower carbon energy offering. Last year, the company bought Western Power Distribution, the UK’s largest electricity distribution business, for £7.8 billion from PPL.
A government official said the review is now standard procedure for takeovers of this size in the energy sector. In a statement, the Department for Business, Energy and Industrial Strategy said that the government has the power to “monitor and intervene in acquisitions where necessary”.
Ministers have 30 working days to review the Macquarie deal, although that could be extended by 45 working days. The Sunday Telegraph first reported that the deal was under consideration.
The UK Government does not regularly notify the public when it chooses to review a transaction under the Act.
But in May, business secretary Kwasi Kwarteng said the government would look into it Take over UK’s largest semiconductor factory of the Dutch branch of the Chinese company Wingtech. That’s because Nexperia decided to acquire Newport Wafer Fab in July before seeking an extension.