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CMS advises a Consortium on acquisition of 60% stake in National Grid gas transmission and metering

4 April 2022

International law firm CMS has advised a Consortium comprising Macquarie Asset Management, a global asset manager and the world’s largest infrastructure manager, and British Columbia Investment Management Corporation (BCI), one of Canada’s largest institutional investors, on its agreement to acquire a 60% stake in National Grid’s UK gas transmission and metering business. The terms of the transaction imply an enterprise value for the business of approximately £9.6bn.

National Grid owns and operates the UK’s regulated national gas transmission system and an independent gas metering business. The 7,630km transmission system plays a critical role in the UK energy landscape, transporting the gas needed to heat homes and power industry and electricity generation.

The Consortium will partner with National Grid to ensure the national gas transmission system and metering business remain secure, safe and reliable while enabling the UK to accelerate its transition away from fossil fuels, at least cost to consumers. The Consortium invests on behalf of long-term institutional investors including pension and insurance funds, and intends to remain invested in the business over multiple regulatory periods, having acquired its stake under existing RIIO-2 regulatory obligations. 

As part of this transaction, the Consortium has also entered into an option agreement with National Grid for the potential acquisition of the remaining 40% stake in the business on broadly similar terms, subject to necessary adjustments. 

Charles Currier, CMS partner and Co-head of Corporate at CMS UK, comments: “We are delighted to have advised Macquarie Asset Management and BCI on this strategic acquisition. The Consortium’s investment will play a crucial role in ensuring that the national transmission system is able keep pace with the increasing deployment of renewable energy – including the expansion of hydrogen’s role in the UK’s energy mix.”

Completion will be subject to certain antitrust and regulatory conditions. Subject to these clearances, the transaction is expected to complete in the second half of 2022.

The CMS team was led by Charles Currier and Doug Land. Patrick Donegan led on the financing. They were supported by Jennifer Louch, Maximillian Weaver, Alicia Ingham, Aoife Fenlon, Gemma Hall, Greg Moreton-Smith and Rebecca Quinn (Corporate); Munir Hassan, Juliet Stradling, Louise Dalton, Thomas Forman, Filip Radu, Helen Raynsford and Gregor Hunter (Energy); Michael Cavers, Kirsty Templar, James Simmons, Alex Gewanter and Nicole Morris (Finance); Brian Sher, Ruth Derruau and Louisa Mottaz (Competition); Aaron Fairhurst and Jason Todd (Tax); Duncan Turner and Daniel Gallagher (Technology); Mark Walker and Laura McArdle (Employment); Jennifer Bell, Victoria Lee and Dawn Cran (Pensions); Joanna Waddell (Environment); and Kevin O’Shea (Insurance).