Paris-headquartered Engie said as it announced the acquisition of the UK electricity grid operator that  with the deal “rebalancing its infrastructure activities toward regulated electricity networks … is largely achieved in one move.”

Engie is paying CK Infrastructure an equity price of GBP 10.5bn for UKPN, which has a 192,000 km network serving 8.5 million customers in London, the South-East and East of England. This gives the business an enterprise value of GBP 15bn, which is around 1.5 times UKPN’s estimated regulated asset value (RAV) for the end of next month.

Engie first signalled its planned pivot to this sector in 2024 when it pledged to expand into power networks in Europe.

UKPN will add around EUR 1.7bn (GBP 1.5bn) of EBITDA to Engie’s 2025 EUR 14.7bn EBITDA, note analysts at rating agency S&P Global, a big jump from the 3% of EBITDA power networks currently account for. The analysts affirm their investment grade BBB+ rating on Engie, noting that UKPN increases Engie’s exposure to “credit-supportive regulated power grids”.

Engie is already a major player in gas grids in France and is active in power transmission in Brazil and Chile. In 2025, Engie said its aim was for 63% of EBIT to come from regulated or long-term contracted activities in 2027, compared with 42% in 2024.

The aim is now for this to be 67% and buying UKPN is a “major step toward that objective”, a spokesperson for the company said.

Speaking during a call with analysts, Engie chief executive Catherine McGregor said that buying UKPN means it does not have to do any other big deals in power grids in coming years to fulfil its ambitions, but will be growing by investing in UKPN and in the Latin American businesses. Engie noted in the announcement that UKPN is embarking on a “period of significant investment”.

Engie’s acquisition of UKPN continues a theme of energy companies investing in UK electricity distribution grids, following Iberdrola’s acquisition of Electricity North West (ENW) from shareholders including Equitix in 2024 for around 1.4 times RAV and National Grid’s acquisition of Western Power Distribution from US utility PPL for around 1.6 times RAV in 2021.

“Energy companies have discovered that grids provide much more stable earnings than renewables and buying UK power grids certainly does this for Engie and Iberdrola,” said one industry observer.

Other European utilities active in renewables and grids that have shifted more towards the latter in recent years include Italy’s A2A, which acquired electricity grids from Enel in 2024.

Engie had been circling the UK electricity distribution market for some time, with Infralogic reporting that it was among the final bidders for ENW in 2024, a fact that was confirmed by Engie executive vice president Pierre-François Riolacci during the analyst presentation.

The purchase of UKPN meanwhile was the result of “a non-process – UKPN was not up for sale”, according to McGregor. UKPN had been up for sale in 2022, but the sale collapsed after a KKR Infrastructure and Macquarie Asset Management-led consortium pulled its bid.

Paris- and Brussels-listed Engie, whose shares closed up more than 7% following the announcement of the acquisition, is planning to raise EUR 3bn through an accelerated bookbuild to fund the acquisition, alongside debt and asset disposals of EUR 4bn by 2028.

McGregor declined to name specific assets Engie will look to sell but told analysts these will include ones it doesn’t fully control, assets it fully controls but could sell minority stakes in and assets that are “not core” and could be sold as part of “housekeeping”.

Disposals during 2025 included the sale of stakes in gas-fired power generation and water desalination assets in Bahrain to Saudi Arabia’s ACWA and of an energy services company in the US.

Engie’s minority holdings include 35% in the Red Sea Wind Energy consortium developing a wind farm in Egypt as well as minority stakes in two diesel plants in South Africa and in HomeBiogas, a small scale biogas system provider active in Europe and emerging markets.

Given the size of the UKPN acquisition, most of Engie’s M&A activity once the transaction completes looks set to involve disposals rather than acquisitions.

But McGregor said during the analyst call that it has plans for major investment in its existing assets, including generation and Latin American power transmission, adding that “it is fantastic to be able to say” the UKPN acquisition means this will also now include power distribution.