National Grid’s intended sale of its gas distribution networks: Decision on conditions precedent prior to hive down
Decision
Publication date
Company
Industry sector
- Distribution Network
- Transmission Network
On 10 November 2015, National Grid plc (NG) announced it intended to sell a majority of its shares in its gas distribution business. In preparation for this sale, NG intends to transfer its distribution assets and distribution licence from National Grid Gas plc (NGG) to a new subsidiary company (this process is termed as hive across). The Authority has a role in deciding whether to consent to these transfers.
On 23 June 2016, we received a notice from NGG requesting permission to transfer its gas distribution transportation assets from NGG to a new subsidiary company under Standard Special Condition A27 of the distribution licence. In anticipation of receiving this request from NGG, in May 2016, we published a consultation which described our role in the sale process and sought stakeholder views on issues arising from these potential transfers, ahead of any consent to transfer being given by the Authority.
Our decision, published on 6 July granted conditional consent to the transfer of gas distribution transportation assets. The conditions can be separated into conditions precedent, which are conditions that have to be met by NGG prior to hive across; and conditions subsequent, which are conditions that have to be met after hive across but prior to any majority share sale.
This document sets out our decision that the conditions precedent to the transfer of gas distribution assets, prior to the hive across have been met.
The document also includes the evidence provided by NGG, in respect of meeting the conditions precedent.