Competition watchdog probes ScottishPower owner’s £2.1bn network deal
The Competition and Markets Authority will decide by March 27 whether to refer the acquisition for an in-depth investigation.
A probe into ScottishPower owner’s £2.1 billion deal to buy North West Electricity Networks has been launched by Britain’s competition watchdog.
The Competition and Markets Authority (CMA) said it is investigating whether the deal may affect competition in the sector.
The CMA will decide by March 27 whether to refer the acquisition for an in-depth investigation.
Interested parties have until February 12 to submit their comments.
ScottishPower’s Spanish parent firm, Iberdrola, announced the deal in August, which will see it add a large chunk of north-west England’s power grid to its network.
Iberdrola agreed to buy 88% of North West Electricity Networks – which trades as Electricity North West (ENW) and operates the grid from Carlisle down to Manchester and Merseyside.
ENW distributes electricity to almost five million people and has more than 37,000 miles (60,000km) of electricity distribution networks, which will be operated by ScottishPower after the deal.
The Glasgow-based firm will overtake SSE as the second largest distribution network operator in the UK behind National Grid, serving about 12 million people – just under six million homes – across southern Scotland, northern England and parts of Wales.
Distribution network operators (DNOs) are licensed companies that own and operate the network of towers, transformers, cables and meters that carry electricity from the main transmission grid to large geographical areas, such as Manchester or Merseyside.
Before the deal, there were 14 licensed DNOs across Great Britain, owned by six different parent groups.
As well as running power networks, ScottishPower is an energy supplier to 4.2 million customers and it operates offshore and onshore wind farms across the UK. The ENW deal does not affect its retail supply or generation arms.
Iberdrola and a consortium of investors, led by Japan’s Kansai Electric Power, which will retain 12% of ENW’s capital, have signed a shareholders’ agreement to collaborate on a long-term basis.
The ENW deal makes the UK the market in which Iberdrola has the biggest stake in terms of assets, followed by the United States.
