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National Grid PLC ADR NGG

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Morningstar’s Analysis

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National Grid to Buy PPL's U.K. Assets, Plans To Sell U.K. Gas Transmission, Rationale Is Sound

Tancrede Fulop, CFA Equity Analyst

Analyst Note

| Tancrede Fulop, CFA |

We maintain our fair value estimate of GBX 800 and no moat, stable ratings after National Grid announced it will buy PPL's U.K. electricity distribution assets, WPD, for an enterprise value of GBP 14.2 billion. National Grid will fund the acquisition by selling its Rhode Island networks to PPL and by putting its majority stake in U.K. gas transmission assets up for sale. Shares appear fairly valued.

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Company Profile

Business Description

National Grid owns and operates the electric and gas transmission system in England and Wales. In 2019, it divested its U.K. natural gas distribution business. In the Northeastern United States, it serves 7.1 million electricity and gas customers combined in three states. It also owns regulated transmission and electricity generation in the United States, metering services, merchant transmission lines in the U.K., and the Grain (U.K.) liquefied natural gas facility.

1-3 Strand
London, WC2N 5EH, United Kingdom
T +44 2070043000
Sector Utilities
Industry Utilities - Regulated Electric
Most Recent Earnings Mar 31, 2008
Fiscal Year End Mar 31, 2021
Stock Type
Employees 23,057