Engie and CDPQ Team Up with €4bn Bid for UK’s Electricity North West Against Iberdrola

Jul 12, 2024 | News | 0 comments

European utility Engiehas joined forces with Canada’s second-largest pension fund to try to buy British power network Electricity North West (ENWL), according to two sources with knowledge of the matter.
The consortium formed by Engie and Caisse de dépôt et placement du Québec (CDPQ) is set to compete with Spanish utility Iberdrola which is also preparing a binding offer ahead of the deadline set by ENWL shareholders in two weeks, the people said.
ENWL could be valued at over 4 billion pounds ($5.1 billion), a third person familiar with the matter said, with the two bidders now in direct competition following the withdrawal of private equity firms such as KKR.
Get the week’s top news delivered directly to your inbox – Sign up for our newsletter
Sign up
All three sources spoke on condition of anonymity because the talks are private.
Iberdrola, Engie and CDPQ declined to comment.
Infrastructure investors and utilities are drawn to the stable, predictable returns of grids like ENWL, particularly during a period when the renewable energy sector is under pressure from high interest rates, increased debt costs and supply chain disruptions.
Iberdrola, with deep pockets after the sale of assets in Mexico, started preparing an offer for ENWL in November, Reuters reported previously.
Earlier this year, the Spanish group revealed plans for net investments of up to 36 billion euros ($39 billion) by 2026, with nearly two-thirds of this figure being allocated to electricity grids.
Buying ENWL could help Iberdrola connect areas that it already serves through its Scottish Power business.
For its part, Engie is eager to augment its exposure to regulated assets like power and gas networks, aiming to increase their contribution to its core earnings from the current 35% to 50% by 2026.
The French company has suffered from political uncertainty in its home market and its shares have lost around 8% in 2024. Analysts from Morgan Stanley said in a note this week that the risk of an increase in France’s windfall tax on the energy sector had been partly priced in to Engie´s shares.
Source: Reuters

Can’t stop reading? Read more