National Grid, the UK natural gas and electricity network operator, is seeking to sell the majority stake in its domestic gas-distribution business, the Wall Street Journal reports.
The network comprises half of the British network which delivers gas to nearly 11m customers. Analysts estimate the value of the network at $15b.
With the sale, National Grid is seeking to re-balance its portfolio and create value for shareholders. Infrastructure funds, pension funds and sovereign wealth funds are expected to be the primary parties interested, as returns for the business are expected to be stable and alternative safe investments, particularly bonds, are seeing low yields.
Steve Holliday, CEO of National Grid, stated that “the gas distribution networks are a good business, but a mature business. We believe selling a majority stake moves our assets toward the higher end of growth.” Forbes reports that growth in the gas distribution business has been around 2% annually.