ENGIE has signed an agreement to acquire UK Power Networks (UKPN), an electricity distribution network company, for an equity value of £10.5bn ($14.2bn).
The deal is expected to close in mid-2026 following regulatory approvals and clearances by the shareholders of the Hong Kong-listed parent companies of the sellers.
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ENGIE will fully own UKPN, which serves 8.5 million customers across London, the South East and East of England through three regulated licences.
The acquisition values UKPN at an enterprise value of £15.8bn, approximately 1.5-times its estimated regulated asset value as of March 2026 and around ten-times its projected 2027 earnings before interest, taxes, depreciation and amortisation, including unregulated assets.
The company manages a 192,000km distribution network, with three-quarters located underground, and delivers approximately 71 terawatt-hours of electricity annually.
ENGIE will finance the acquisition through a combination of debt and hybrid issuance totalling roughly €5bn, alongside a planned €4bn disposal programme by 2028.
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By GlobalDataAdditionally, the company intends to raise up to €3bn in equity via an accelerated book building process to maintain its investment-grade credit rating.
ENGIE CEO Catherine MacGregor said: “The acquisition of UKPN represents a decisive step in strengthening ENGIE’s position as the best energy transition utility. This transaction will both enhance the Group’s growth trajectory and reduce our risk profile, providing more visibility on future earnings.”
Following the acquisition, ENGIE plans to retain flexibility in capital allocation for further development in renewables and network operations.
The acquisition is expected to increase ENGIE’s capital employed by €17bn–19bn at the end of 2026, while raising net financial debt by €13bn–15bn based on current projections.
Financial advisors for ENGIE on this transaction are Bank of America, BNP Paribas and Rothschild & Co.
