Quad Gas Group, a consortium of long-term infrastructure investors, today announces that it has entered into an agreement with National Grid plc to acquire a 61 percent shareholding in its four regulated gas distribution networks.
These gas distribution networks cover the East of England, North London, North West and West Midlands, and distribute gas to approximately half of the country’s connected households through 130,000 km of gas pipeline. They represent approximately 14 percent of the total regulated energy infrastructure sector in Great Britain by regulated asset value and are regulated by Ofgem.
The consortium is made up of Macquarie Infrastructure and Real Assets (MIRA), CIC Capital Corporation, which is a wholly owned subsidiary of China Investment Corporation, Allianz Capital Partners, Hermes Investment Management, Qatar Investment Authority, Amber Infrastructure and Dalmore Capital.
The transaction is expected to complete in Q1 2017 following regulatory approval. The vendor, National Grid plc, an international electricity and gas company headquartered in the UK, will retain a 39 percent stake in National Grid Gas Distribution.
National Grid plc also announced today that they and the Consortium have expressed an interest in relation to the potential future sale and purchase of an additional 14 percent stake, on broadly equivalent financial terms to the Transaction. Further details will be announced if agreement is reached.
Peter Hofbauer, Head of Infrastructure, Hermes Investment Management said:
“National Grid’s Gas Distribution Networks are strategic UK Infrastructure assets and are an excellent fit within our core investment strategy, which targets infrastructure businesses that deliver long-term predictable inflation-linked cash flows, with robust cash yield. We look forward to supporting the business in making its important contribution to the U.K. economy alongside our consortium partners and National Grid.”