The UK government is to review a £4.2bn foreign takeover of a key part of the country’s gas infrastructure amid increased concerns about energy security.
The sale of a 60 per cent stake in National Grid’s gas transmission business to an international consortium led by Australia’s Macquarie, the world’s largest infrastructure investor, is to be reviewed under the National Security and Investment Act.
The intervention comes as the war in Ukraine and soaring fuel prices have focused attention on who controls energy infrastructure and sources of supply.
The NSI Act, which came into force at the start of the year, significantly expanded the government’s power to scrutinise foreign purchases of companies in 17 sensitive areas of the economy, including energy, defence, transport, data infrastructure and communications.
A spokesperson for National Grid said the review process had been anticipated.
In its annual report, the FTSE 100 company said the sale was subject to “certain antitrust and regulatory conditions” and was expected to close in the second half of 2022.
The National Grid deal means the Macquarie-led consortium will take over 7,660km of pipes transporting gas to heat homes and power industry and electricity generation across Britain.
The consortium said the deal was subject to a “range of competition and regulatory approvals” including a review under the NSI Act. “We are working with the relevant bodies to progress these approvals,” it said.
Macquarie is already a significant investor in the UK, having spent about £50bn on British 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 £5.4bn, in a consortium of investors that included the Qatari and Chinese sovereign wealth funds.
National Grid, which controls the national electricity transmission network in the UK, has been seeking to shift its business away from fossil fuels towards the provision of lower-carbon power. Last year it bought Western Power Distribution, the UK’s largest electricity distribution business, for £7.8bn from PPL.
A government official said the review was now standard procedure for a foreign takeover of this size in the energy sector. In a statement, the Department for Business, Energy and Industrial Strategy said that the government had the power to “monitor and intervene in acquisitions where necessary.”
Ministers have 30 working days to consider the Macquarie deal, although that can be extended by up to another 45 working days. The Sunday Telegraph first reported that the deal was under review.
The UK government does not routinely inform the public when it chooses to review a transaction under the Act.
But in May, business secretary Kwasi Kwarteng said the government would review the takeover of Britain’s largest semiconductor plant by the Dutch subsidiary of Chinese company Wingtech. It was due to take a decision on the acquisition of Newport Wafer Fab by Nexperia in July before it sought an extension.
Image and article originally from www.ft.com. Read the original article here.