National Grid Group, monopoly owner of the electricity grid in England and Wales, said today it would buy the UK's gas distributor, Lattice Group in a deal worth about £6.3 billion sterling.
The agreed deal brings together two national monopolies and creates Britain's largest energy utility with a market value of around £14.8 billion and £14.3 billion in debt. Together they form the backbone of Britain's energy distribution network.
National Grid's chairman James Ross said that the new merged group, to be called National Grid Transco, would be a 'world class energy delivery company'.
Under the agreement, Lattice shareholders will get 0.375 new National Grid Transco shares for each Lattice share. National Grid shareholders will have their stock renamed as National Grid Transco stock.
A deal combining two of Britain's largest companies could attract scrutiny from regulators, politicians and consumer groups. Lattice Group was spun off from BG Group, formerly British Gas, in 2000.
National Grid was created in 1990 by the deregulation and privatisation of Britain's energy market.
News of the deal comes amid a flurry of takeovers in the European utility industry in recent years, with British firms often the target of larger operators on the continent. British electricity supplier Innogy succumbed last month to a £3.1 billion agreed takeover by Germany's RWE.
