Government set to wave through international takeover of National Grid gas network

William Turvill
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The National Grid agreed a sale for its gas distribution network earlier this month (Source: Getty)
he government is set to wave through the sale of the National Grid’s gas network to an international consortium, City A.M. has learned.

CIC Capital, a subsidiary of China’s sovereign wealth fund, the Qatar Investment Authority (QIA) and Australian investment bank Macquarie were among the successful bidders for a 61 per cent stake in the Grid’s gas pipelines, in a deal valuing the network at £13.8bn.

And there were concerns among those working on the deal that the government, which has indicated a willingness to intervene in foreign takeover deals, could potentially seek to block the deal.

Read more: National Grid plans special divi after £14bn sale of its gas network

But sources close to the deal have told City A.M. this is no longer a concern and that the government has indicated it will not stand in its path.

CIC, QIA and Macquarie were joined in the consortium by Germany’s Allianz Capital Partners, and British firms Hermes Investment Management, Amber Infrastructure and Dalmore Capital.

The deal was seen as a potential test for Theresa May’s government after she and her chancellor, Philip Hammond, had indicated that future deals would be examined “on a case-by-case basis to ensure they are in the national interest”.

Read more: The inside story: How SoftBank persuaded Theresa May to ok its Arm takeover

In addition, after the government belatedly waved through the Hinkley Point project in September, the Department for Business, Energy and Industrial Strategy (BEIS) said it was developing a “new legal framework for future foreign investment in British critical infrastructure”.

This new framework is not in place and could not have been used on the National Grid sale. However, it could still have been subject to intervention from the government and was seen as potentially vulnerable because it related to infrastructure.

BEIS declined to comment. The Grid sale is due to complete in the first quarter of next year.

Meanwhile, Theresa May yesterday met with Chinese state councillor Yang Jiechi, foreign policy adviser to President Xi. During the meeting, the Prime Minister “reaffirmed her commitment to developing a genuine strategic partnership in this ‘golden era’ of bilateral relations”, according to Downing Street.

The spokesperson added: “They agreed priority areas in the coming year would include enhanced trade and investment between our two countries, greater co-operation on security, and more joint work to tackle global challenges such as climate change.”

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