National Grid sale covers key chunk of UK infrastructure

During the Conservative leadership contest and her early days as Prime Minister, Theresa May made clear she was anxious about the growing trend for foreign companies and investors to buy British businesses.

She (Munich: SOQ.MU - news) even, when announcing the construction of the new Hinkley Point C nuclear power station in Somerset, said she would be holding a review of the 2002 Enterprise Act to look into whether the Government could intervene in foreign takeovers of crucial UK infrastructure and block them if they were deemed not to be in the public interest.

On the face of it, one such deal has been announced this morning, with National Grid (LSE: NG.L - news) announcing that it is selling 61% of its UK gas distribution business to a consortium that, in addition to the Australian investment bank Macquarie, also includes the Qatar Investment Authority and the China Investment Corporation (CIC (Shenzhen: 000038.SZ - news) ), the country's sovereign wealth fund.

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This deal, which values the business at £13.8bn, looks exactly the kind of deal that Mrs May's review should be covering yet, apparently, ministers are unlikely to intervene because the review is yet to be completed.

John Pettigrew, the Grid's chief executive, has also done his best to convince passers-by to move along as there is nothing to see, telling Reuters: "CIC already have holdings in Heathrow Airport and Thames Water, they're well known in the UK infrastructure market today.

"There are absolutely no concerns."

Yet imagine the furore if, for example, BT Openreach - the owner of Britain's fixed-line and broadband network - was to be taken over by a consortium including Chinese investors.

We would never hear the end of it.

Yet National Grid's UK distribution business, which serves more than 11 million homes and businesses, is every bit as vital a part of the nation's infrastructure, if not more so.

It seems strange that politicians are not making more of a noise about this.

Meanwhile, the sale of the business - which was once owned by British Gas and Lattice Group, one of the constituents into which it later broke up - is another big moment in the Grid's evolution.

It means the company, which will distribute £4bn of the sales proceeds to its investors, including getting on for half a million small shareholders, is now much more focused on the United States, a market in which it sells electricity directly to homes in New York and Connecticut.