Energy giant SSE is to sell its 33.3% stake in Scotia Gas Networks (SGN) for £1.22 billion.
The company saw its shares lift higher after it wrapped up its major programme of disposals as part of its transformation strategy.
Gregor Alexander, finance director of SSE, said the gas operation had become a “purely financial investment” as it focuses further on its core business of low-carbon electricity.
The deal will see SSE sell its stake in the business to a consortium comprising of existing SGN shareholder Ontario Teachers’ Pension Plan Board and Brookfield Super-Core Infrastructure Partners.
The sale is expected to complete later this year and is conditional on regulatory approval.
SSE initially bought a 50% stake in SGN – which supplies gas to customers in Scotland, Northern Ireland and England – in 2005 for £505 million, before selling a 16.7% stake to a subsidiary of the Abu Dhabi Investment Authority 11 years later.
It is the final sale in SSE’s major disposals programme, which it launched last June.
The company has now secured proceeds of more than £2.7 billion from its non-core assets and allowed to increase investment elsewhere in the business.
Mr Alexander said: “We see significant growth opportunities in our core networks and renewables businesses in the transition to net zero and the capital we are releasing through our disposals programme will help enable us to maximise the delivery of our low-carbon electricity orientated strategy and ultimately create sustainable long-term value for customers, shareholders and society.
“Completion of our disposals programme will leave SSE more streamlined and strategically aligned than ever before, with a business mix that is very deliberate, highly effective, fully focused and well set to prosper on the journey to net zero and beyond.”
Shares in the company were 1.1% higher at 1,461.5p in early trading.
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