National Grid and Niagara Mohawk have signed a merger agreement under which National Grid will acquire all of the outstanding shares of Niagara Mohawk for a combination of New National Grid Shares and cash.
Serving over 1.5 million electricity and over 540,000 gas customers, Niagara Mohawk is the second largest combined electricity and gas utility in New York State. The transmission and distribution company also holds a limited number of non-core businesses. Niagara Mohawk reported earnings before interest, tax and depreciation last year were $1.3 billion on revenues of $4.1 billion. The acquisition more than doubles the size of National Grid’s US operations. As a result of the merger, National Grid will own and operate the most extensive transmission network in northeast US and be the second largest power distributor. The acquisition also creates the ninth largest electricity utility in the U.S. The move also improves the profile of the enlarged National Grid group with more than half the group’s operating profits after completion being derived from the US, where National Grid is able to achieve higher returns on investment than in the UK.
Based on a report from ElectricNet
