Engie Group invests £10.5 billion to acquire UK electricity network company

Investing.com - French utility company Engie Group (EPA:ENGIE) announced on Thursday that it has signed an agreement to acquire 100% of UK Power Networks for £10.5 billion in equity value.

The company’s enterprise value is £15.8 billion, approximately 1.5 times the estimated regulated asset value (RAV) at the end of March 2026 and about 10 times the projected EBITDA before interest, taxes, depreciation, and amortization for 2027, including additional contributions from non-regulated assets.

UK Power Networks’ regulated asset value was £9.2 billion as of the end of March 2025, and is expected to reach £10.5 billion by the end of the current price control period in March 2028.

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Engie plans to finance the acquisition through approximately €5 billion in debt and hybrid bond issuance, as well as a disposal plan of about €4 billion by 2028. The company also intends to raise up to €3 billion in equity through accelerated bookbuilding to support its long-term commitment to maintaining a strong investment-grade rating.

The transaction is expected to have an immediate positive impact on the group’s performance and generate value from the first full fiscal year after completion, while maintaining Engie’s credit rating and supporting its dividend policy.

The deal is expected to close by mid-2026, subject to certain regulatory approvals. It also requires approval from the independent shareholders of the seller’s Hong Kong-listed parent company.

The combined effect of the acquisition and the anticipated asset disposal plan within the year is expected to result in a net increase of approximately €17 billion to €19 billion in capital expenditure by the end of 2026. The transaction is projected to increase the group’s net financial debt by €13 billion to €15 billion by the end of 2026.

Engie CEO Catherine MacGregor stated that this acquisition is a decisive step in strengthening Engie’s position as the leading energy transition utility, fully aligned with the company’s ambition to become a key participant in regulated electricity network infrastructure. MacGregor said the deal will enhance the group’s growth trajectory and reduce its risk profile, providing greater visibility for future earnings.

UK Power Networks CEO Basil Scarsella said that this transaction marks an important milestone in the company’s and its employees’ history. By joining Engie, the company will continue to be part of the global energy leadership, with the financial strength, industrial capabilities, and long-term vision needed to support its next phase of development, Scarsella added.

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