PPL Corp. sells U.K. business, acquires Narragansett Electric from National Grid
PPL Corp. is selling its U.K.-based utility business, Western Power Distribution (WPD), to National Grid, but it is buying another company.
In a separate transaction, PPL is acquiring National Grid’s Rhode Island utility business, The Narragansett Electric Company, for $3.8 billion. The moves are part of a strategic repositioning to transform Pennsylvania-based PPL into a purely U.S.-focused energy company.
“The strategic transactions we are announcing today immediately unlock value for shareowners and achieve the objectives we set out in launching the process to sell our U.K. utility business,” PPL President and CEO Vincent Sorgi said. “They will refocus our business mix squarely on strong, rate-regulated U.S. utilities; strengthen our credit metrics; enhance long-term earnings growth and predictability; and provide us with greater financial flexibility to invest in sustainable energy solutions for those we serve.”
PPL is selling WPD to National Grid in an all-cash transaction valued at £14.4 billion, including the assumption of approximately £6.6 billion of debt. The sale is anticipated to result in net cash proceeds of approximately $10.2 billion for PPL.
The acquisition of Narragansett Electric from National Grid is valued at $5.3 billion, including the assumption of approximately $1.5 billion of Narragansett Electric debt. Portions of the proceeds from the sale of WPD will be used to finance this acquisition.
“We believe these transactions, which follow our highly competitive U.K. sale process, represent wins for PPL, National Grid, and the customers we serve,” Sorgi said. “In National Grid, we’ve found a respected partner that has a long track record of strong operations in the U.K., is eager to build on WPD’s success, is focused on advancing U.K. decarbonization initiatives, and shares a strong commitment to employees, customers, and the communities we serve in the U.K. We believe National Grid will continue to deliver positive outcomes for all of WPD’s stakeholders.”
PPL plans to use the net cash proceeds from the transactions to strengthen its balance sheet and enhance opportunities for strategic growth.
“We expect to leverage our proven track record of operational excellence, award-winning customer service, strong reliability, and cost efficiency to continue to improve service and deliver energy safely, reliably, and affordably to Rhode Island families and businesses,” Sorgi said. “In addition, we’re eager to play a key role in advancing Rhode Island’s decarbonization goals. We believe our experience in automating electricity networks can help the state achieve its target of 100% renewable energy by 2030. And we look forward to being a strong community partner in Rhode Island, something that has been a hallmark of PPL for more than a century.”
After both transactions close, PPL will serve approximately 3.5 million electricity and gas customers in the U.S., including 780,000 customers from Narragansett Electric. The sale of WPD will close in four months, while the deal for Narragansett Electric will close within a year, pending approvals.
