National Grid to sell-off of its gas distribution arm in a £10 billion auction

National Grid Plc is in early talks to sell its gas distribution operation in an auction with foreign investors that could be worth up to £10 billion.

This Is Money reports that the energy giant wants to tap the skyrocketing demand for infrastructure assets from overseas investors. National Grid, which is valued at £33.4 billion, owns and operates a network of electricity systems in the UK. 11 years ago, it sold 50 percent of its UK gas distribution network. It is now considering whether to sell the remainder of the network as a whole or in small parts.

Reuters writes that the National Grid PLC board is considering options for the four remaining gas distribution networks across Britain. Talks at an early stage are held on whether to sell these assets outright, in piecemeal deals, or through stake. This sale may attract Canadian pension funds or Asian sovereign wealth funds. It could even attract interest from dedicated infrastructure firms.

According to Bloomberg Business, there are no financial advisers assigned for the sale yet. The sale is expected to happen early 2016. This report about the sale comes as the firms Chief Executive Officer Steve Holliday is set to retire next year. He will be replaced by John Pettigrew, who is the current UK Holliday executive director. Holliday served as the company chief executive for almost a decade. He has been with the company for 14 years.

The four remaining gas distribution networks of the National Grid connect West Midlands, eastern England, and the north-west of UK, as well as certain parts of London. Its long-distance, high-pressure national transmission pipelines are not included in the possible sale.

However, there are no official statements or comments from the National Grid about the possible sale of its four remaining gas distribution networks across Britain.

Besides the National Grid, France's largest utility, EDF, is also considering selling its national electricity transmission network as well.