CMA clears National Grid’s acquisition of WPD

National Grid’s acquisition of Western Power Distribution (WPD) has been formally approved by the Competition and Markets Authority (CMA).

The CMA had ordered National Grid to hold off from taking control of WPD in June this year while it considered whether to launch an in-depth investigation into the planned £7.8 billion acquisition.

However, the competition watchdog revoked its initial enforcement order last month and has now announced its decision to approve the completed acquisition.

National Grid agreed to buy the electricity distribution network in March this year, as part of several moves to “strategically pivot” its UK portfolio towards power.

At the same time the company also agreed to sell the Rhode Island-based Narragansett Electric Company to WPD’s US owner PPL Corporation for $3.8 billion (£2.7 billion).

Additionally the group unveiled plans to sell a majority stake in its gas transmission business National Grid Gas (NGG).

The transactions will increase the proportion of its assets in electricity from roughly 60 to 70 per cent.

To ensure management continuity, National Grid has previously said the chief executive and chief financial officers of WPD will lead the business as part of an enlarged group. It said it also intends to maintain the WPD headquarters in Bristol and offices in other key locations.

In an interview with Utility Week on the subject chief financial officer Andy Agg said National Grid would take a “light touch” approach to the integration of WPD, keeping it as a distinct unit within the wider group, but said there are opportunities for cost efficiencies “further down the track”.