HSF Kramer and Linklaters steer £10.5bn sale of UK Power Networks

HSF Kramer and Linklaters have landed lead roles on Engie’s acquisition of UK Power Networks, in one of the largest UK infrastructure deals in recent years.

Paris-headquartered Engie is buying the business from CK Infrastructure Holdings, part of Hong Kong billionaire Victor Li’s CK Group, in a transaction that values the company at £10.5 billion.

UK Power Networks is Britain’s largest electricity distribution company by customer numbers, serving 8.5 million households and businesses across London and the south-east. The French government holds a 23% stake in Engie, adding a political dimension to the takeover of one of the UK’s most critical infrastructure assets.

Engie said it will finance the acquisition through a combination of €4 billion of asset disposals, new debt and a €3 billion equity raise.

CK bought UK Power Networks in 2010 for around £6 billion and had been exploring a sale of its UK distribution business for at least four years. In 2022, it held talks with a consortium led by Macquarie and KKR, but no deal materialised.

In an unusual feature, CK opted not to appoint any investment banks as financial advisers on the transaction, according to Bloomberg - a rare move on a deal of this size, and one that left Wall Street and the City’s advisory houses watching from the sidelines.

Advising

HSF Kramer is advising Engie. The team is being led by Frédéric Bouvet in Paris alongside London partners Caroline Rae and Silke Goldberg.

Linklaters is acting for CK Group, with a London corporate team led by Rob Cleaver, Henrietta White and Namrata Shah.