A pair of foreign companies are suspected to have paired up to purchase Britain’s National Grid, a very large distribution network that was put up for auction last year. The asking price is approximately $14.3 billion USD. China Gas and the conglomerate Fosun, which owns businesses ranging from insurance to mining and is the owner of Club Med, are thought to be making a joint effort to purchase controlling shares of the network. The National Grid spans the country and supplies gas to approximately 10.9 million customers.
As for National Grid, 51 percent of the firm is up for auction. The bidding consortium of Fosun and China gas have competition. Australian bank Macquarie is thought to be heading up a rival bidding group that may include the sovereign wealth fund China Investment Corporation. Another contender is the Canada Pension Plan Board. The first round of bidding ends this month. A spokesman for National Grid stated: “We will not speculate on the identity of potential bidders. Regardless of their identity, all bidders will have to go through the same rigorous approval process.”
The joint bid by Fosun and China gas comes at an interesting time. Less than a week prior, Britain’s Prime Minister, Theresa May, announced that the country would impose tighter regulations on companies that invest in the nation’s infrastructure. May made the announcement after giving the nod to a new nuclear reactor at Britain’s Hinkley Point in Essex, which is being financed by firms from France and China. The Chinese State nuclear firm will pay one third of the cost of that project, which is being led by the French state energy company EDF. That project is valued at around $23.48 billion USD.
Last week, the British Government announced that it would retain a “golden share” in any future nuclear power projects. The golden share would give the ministers the ability to veto any changes in corporate ownership. That move came after May temporarily suspended the Hinkley Point Project over concerns of Chinese involvement in the effort.
By Lincoln Brown for Oilprice.com
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