Tuesday, January 26, 1999 Published at 12:57 GMT
Business: The Company File
Another US buy for National Grid?
UK electricity companies are moving into the US market
The National Grid Group is preparing a bid of up to $1bn (£600bn) for another US electricity company, according to press reports.
The company, which owns the UK's power transmission lines, bought a similar business in the US in December - New England Electric System (NEES) - for $3.2bn.
Now it is believed to want to add the 300,000 customers of Eastern Utilities Associates (EUA) in the states of Massachusetts and Rhode Island to the 1.3m it already has in New England.
"I think National Grid has been flagging this for a while. When they announced a deal with NEES they hinted there would be advantages to expansion in that geographic area," said Marshall Whiting of SG Securities.
Raising money for the deal
Last week the National Grid raised £1.2bn ($2bn) by selling off a stake in its telecoms subsidiary Energis on the London market.
Finance director Stephen Box said at the time that the company was looking to use £500m of that windfall to bolster its presence in the United States.
National Grid wants to see 20% of its profits originating from outside the UK, but some analysts believe they should slow down before making more acquisitions.
"There is some scepticism about UK firms driving into the US. It has not historically been a happy hunting ground," said Nigel Hawkins of William de Broe.
The current drive into the United States has been triggered by the prospect of deregulation of the electricity industry, which has put many firms under pressure. Scottish Power has made the biggest acquisition, buying Pacificorp on the West Coast in a £12bn ($18bn) merger.
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