Probe launched into £2.1bn takeover of Electricity North West by ScottishPower owner
The competition watchdog has launched a probe into a £2.1bn deal to takeover Electricity North West by the owner of ScottishPower.
The Competition and Markets Authority (CMA) is looking into the deal which was first announced by Iberdrola in August last year.
The watchdog said it was investigating whether the deal may affect competition in the sector and will decide by 27 March whether to refer the acquisition for an in-depth probe.
Interested parties have until 12 February to submit their comments.
If no competition issues are raised, the deal will see Iberdrola add a large chunk of North West England’s power grid to its network.
Iberdrola agreed to buy 88 per cent 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.