ADIA makes £621m move into Scottish gas

The deal, which concludes an auction launched by SSE, will see the sovereign wealth fund take a 16.7% stake in Scotia Gas Networks.

The Abu Dhabi Investment Authority has agreed to buy a 16.7 percent stake in SSE’s Scotia Gas Networks in a deal worth £621 million ($738.3 million; €671.5 million).

SSE will remain the largest shareholder of SGN with a 33 percent holding. Canadian infrastructure firm Borealis holds 25 percent of the business, while a subsidiary of the Ontario Teachers’ Pension Plan Board owns another 25 percent.

Borealis was among the frontrunners alongside ADIA for the stake. The deal, scheduled for completion by the end of the month, concludes an auction process for a slice of SGN kicked off in May by SSE, which bought its 50 percent holding in 2005 for £505 million.

“The sale of a 16.7% stake confirms SSE’s ability to deliver value for shareholders through focused, timely disposals while at the same time retaining a diverse range of regulated and unregulated businesses in order to support long term dividend growth,” Alistair Phillips-Davies, SSE’s chief executive, said in a statement.

The SGN transaction will boost ADIA’s UK portfolio, which already includes stakes in Gatwick airport, Thames Water and Angel Trains. SGN operates a network consisting of 74,000km of pipelines in Scotland and Southern England that cover 5.9 million homes and businesses.