French Energy Company ENGIE Acquires UK Power Network to Strengthen Net-Zero Energy Layout

French energy firm ENGIE recently announced that it has reached an acquisition agreement worth 14 billion US dollars (approximately 10.3 billion British pounds) to acquire the entire electricity distribution network in London and the southeast of England. The target of the transaction is UK Power Networks, which will be acquired from the group controlled by Hong Kong billionaire Li Ka-shing. ENGIE stated that this move will further strengthen its business layout in achieving net-zero energy goals and improve its strategic layout in the energy sector.

It is reported that ENGIE is a French enterprise focusing on the production of renewable energy power and green gas, and this acquisition is an important measure for it to expand its energy infrastructure business and promote energy transition. The acquired UK Power Networks is a leading electricity distribution operator in the UK, with its operating network covering London, the southeast and eastern regions of England, serving approximately 8.5 million households and business users, and operating a power grid with a total length of about 192,000 kilometers, occupying an important position in the UK electricity distribution sector[4].

Regarding the funding sources for this acquisition, ENGIE has clarified specific plans. The company plans to raise funds through various financing methods, including approximately 5 billion euros (about 4.4 billion British pounds) in debt and securities financing, and plans to raise about 4 billion euros through asset disposals by 2028. In addition, ENGIE will also raise up to 3 billion euros in equity capital through an accelerated bookbuilding offering, ensuring the smooth progress of the acquisition through multiple channels.

The reaching of this acquisition agreement means that the electricity distribution network in London and the southeast of England will be officially controlled by a French enterprise. It is worth noting that France already has an in-depth layout in the UK energy sector and has previously controlled a considerable part of the UK's nuclear power generation facilities. Currently, all five nuclear power plants in the UK are operated by French company EDF, and the power generation of these nuclear power plants accounts for about 12% of the UK's total electricity supply, providing important support for the UK's energy security.

It is understood that EDF has made in-depth investments in the UK nuclear energy sector. Since acquiring UK nuclear power plants in 2009, it has invested a total of more than 8 billion British pounds, promoted the restart of UK civil nuclear power projects such as Hinkley Point C and Sizewell C nuclear power plants, and extended the operating life of four nuclear power plants many times, providing strong support for the UK's clean energy goals and energy security. This acquisition of the UK power distribution network by ENGIE will further deepen France's layout in the UK energy sector and realize the coordinated development of electricity distribution and nuclear power generation.

Industry insiders analyzed that ENGIE's acquisition is in line with its energy transition strategy. By controlling the power distribution network in the core areas of the UK, it can better integrate renewable energy resources and help achieve its net-zero energy goals. At the same time, for the UK, this transaction will also provide support for the upgrading of its power infrastructure and energy transition. Relying on ENGIE's technology and resources, it will further improve the stability and efficiency of power distribution.

It is reported that the equity value of this acquisition transaction is approximately 10.5 billion British pounds, with an enterprise value of 15.8 billion British pounds, making it one of the largest transactions in the global utilities sector in recent years[4]. Currently, the relevant acquisition process is progressing as planned. After completing the acquisition, ENGIE will further optimize the operation and management of the UK power network, promote its development towards a cleaner and more efficient direction, and contribute to the European energy transition process.