National Grid, the biggest British supplier of gas, today unveiled a $11.8 billion takeover of US peer KeySpan, making it the third-biggest energy provider in the US in terms of customer numbers.
The move highlighted the group's strategy of US expansion in the face of frantic consolidation within the European energy sector. Just two weeks ago, the group agreed to buy the Rhode Island gas distribution operation from US group Southern Union for $575m.
National Grid is to pay $7.3 billion in cash, plus $4.5 billion in debt, the group said in a statement to the London Stock Exchange today. The deal, which has been recommended by KeySpan management, offers $42 a share in cash.
The purchase would make National Grid the third-biggest energy supplier in America with 2.6 million gas customers and 1.1 million electricity customers. It would also become the biggest energy provider in the north eastern US.
Following completion of the deal, which is expected in early 2007, National Grid would double its total US business and residential customers to 7.5 million.
National Grid said it expected $200m a year in savings following completion. The deal is, however, subject to regulatory and shareholder approvals.
