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Vampire Kangaroo Takes Over Critical UK Gas Transmission Business

An Australian investment bank has bought a 60-percent stake in the gas transmission system of National Grid, a top UK electricity and gas utility.

Macquarie, known as "the vampire kangaroo", paid more than $7.5 billion (5.76 billion pounds) for the stake, valuing the whole business at $12.6 million (9.6 billion pounds), the Daily Mail reported.

National Grid operates more than 4,000 miles of gas pipelines across the country, the report noted, adding that the deal might set many in the City on edge because of Macquarie's questionable track record.

The Australian bank earned its nickname "after developing a reputation for buying companies, loading them with debt and sucking out money for shareholders," the Daily Mail noted.

The Australian Financial Review, on the other hand, noted in an article from 2016 that Macquarie was the most likely buyer of not only National Grid's gas distribution business but of the UK's Green Investment Bank as well, making the British parties involved a little sensitive to its growing presence. The Australian bank has, to date, invested some $65.7 billion in British infrastructure projects, including in the Green Investment Bank, which it ended up buying.

"This transaction further enhances our role in delivering the UK's energy transition, pivots our portfolio towards electricity, whilst ensuring the security of the energy supply for the country," said the chief executive of National Grid, John Pettigrew, as quoted by Reuters.

Like many other energy utilities in the UK, National Grid was hit by the energy crunch last year and by the decision of the country's energy regulator to put limits on how much of the additional costs utilities can pass on to consumers. Many smaller utilities went under.

Now, National Grid will remain with a 40-percent stake in its gas business with the option to sell that, too. The majority stake acquisition deal does not require shareholder approval is set to be finalized by the end of this year.

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By Charles Kennedy for Oilprice.com

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