PPL - PPL National Grid to Swap Utilities in Multibillion-Dollar Deals
PPL Corp. (NYSE: PPL) has agreed to sell its U.K. utility business, Western Power Distribution (WPD), to National Grid (NYSE: NGG) for $10.9 billion in cash. In a separate deal, PPL has agreed to buy National Grid's Rhode Island utility business, The Narragansett Electric Company, for $5.3 billion, including the assumption of $1.5 billion in debt.
The transactions will strategically reposition PPL into a high-growth, U.S.-focused energy company with a strong balance sheet. The sale of WPD will generate about $10.2 billion of net cash proceeds for PPL when the deal closes in about four months. The company will use $3.8 billion of that to purchase The Narragansett Electric Company from National Grid while assuming that entity's debt. It expects to close that transaction within one year. That will leave it with $6.4 billion in net cash proceeds to enhance its credit profile and further maximize shareholder value. Among the possibilities for those funds: capital investments into its utilities or renewable energy , and stock buybacks.
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PPL, National Grid to Swap Utilities in Multibillion-Dollar Deals