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National Grid sells majority gas distribution stake

Investors will receive £4bn in net proceeds from the sale
December 14, 2016

National Grid (NG.) has sold a 61 per cent stake in its UK gas distribution business to a consortium of institutional investors, including Qatar Investment Authority and Macquarie Infrastructure and Real Assets. Shareholders will receive around three-quarters of the £4bn in net proceeds via a special dividend during the second quarter of next year. The rest will be returned in the form of share buybacks.

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The energy infrastructure group will receive £3.6bn in cash and retain a 39 per cent stake in the gas distribution business as part of the deal. It will also gain £1.8bn from additional debt financing. Management's rationale for the sale of its majority stake in the mature business is to enable the group to grow the returns it makes on its asset base.