The Firm is leading the representation of PPL Corporation and its UK subsidiaries in their acquisition of the Central Networks electricity distribution business from E.ON UK plc. PPL, through its U.K. subsidiaries, is acquiring Central Networks for approximately £3.5 billion ($5.6 billion) in cash with £500 million ($800 million) of existing public debt to remain outstanding after completion of the transaction. PPL and E.ON expect to close the transaction in early April. In addition, the firm assisted PPL in connection with arranging a committed bridge facility in the approximate amount of $5.8 billion from Bank of America Merrill Lynch and Credit Suisse to be used as a temporary financing facility pending the execution of permanent financing. PPL currently intends to permanently finance the transaction through a combination of the proceeds of security issuances in the US and debt issuances in the UK. This challenging UK transaction, funded by a financing facility arranged in the US, was led by the firm’s London office.
Central Networks’ regulated distribution operations, which serve 5 million customers in the Midlands area of England, are conducted through Central Networks East and Central Networks West, PPL currently owns Western Power Distribution, which provides regulated distribution services to 2.6 million customers in England and Wales through WPD (South West) and WPD (South Wales). After completing the acquisition, PPL will own and operate the largest network of electricity delivery companies in the United Kingdom in terms of regulated asset value, at a combined £4.9 billion ($7.8 billion).
The Simpson Thacher team includes: Adam Signy, Vince Pagano, Christina Barnsley, Peter McCabe and Kevin O’ Connor (Corporate/M&A), James Cross, Antti Pesonen, Brian Gluck and Adam Shelley (Banking & Credit), Arjun Koshal and Brian Rosenzweig (Capital Markets) and Sean Austin (Tax).