SSE divests entire share in Scotia Gas Networks

SSE has agreed to sell its entire 33.3% stake in gas distribution operator Scotia Gas Networks Ltd (SGN) to a consortium comprising existing SGN shareholder Ontario Teachers’ Pension Plan Board and Brookfield Super-Core Infrastructure Partners for a total consideration of GBP1,225 million (US$1.7 billion) in cash. 

SSE initially acquired a 50% equity share in SGN in 2005 for a total of GBP505 million (US$702.3 million), before selling a 16.7% stake to a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) in 2016. The consortium has also agreed to acquire the 16.7% stake in SGN owned by ADIA within the current financial year.

SGN includes Scotland Gas Networks plc and Southern Gas Networks plc, two of the eight regulated gas distribution networks in England, Wales, and Scotland, in addition to SGN Natural Gas Ltd, which provides gas to customers in the west of Northern Ireland as well as other non-regulated ancillary businesses. Following the completion of both transactions, SGN’s direct shareholders will comprise Ontario Teachers’ (37.5%), Brookfield (37.5%), and OMERS Infrastructure (25% unchanged).

Morgan Stanley and Credit Suisse acted as financial advisers and CMS Cameron McKenna Nabarro Olswang LLP as legal advisers to SSE. Nomura acted as financial adviser and Freshfields Bruckhaus Deringer LLP acted as legal advisers to ADIA. Evercore acted as financial adviser to Ontario Teachers’ and Linklaters acted as legal advisers to the Consortium.