PPL Corp. completes acquisition of the UK’s Central Networks electricity distribution business

PPL Corporation has completed its previously announced acquisition of the Central Networks electricity distribution business, the second-largest such business in the United Kingdom, announced the US based firm Friday.

PPL, through a U.K. subsidiary, acquired Central Networks from E.ON UK plc for $5.7 billion in cash, inclusive of certain permitted pre-closing adjustments, and $800 million of existing public debt to be assumed through consolidation.

James H. Miller, PPL's chairman, president and chief executive officer, commented that this strategic, transformational transaction allows PPL to further expand its regulated electricity operations in a way that enhances shareowner value and is immediately accretive to 2011 earnings and cash flow.

Miller further stated that PPL’s highly successful, best-in-class U.K. management team is prepared to implement operational improvements and other efficiencies that will benefit customers and contribute additional accretion to PPL earnings in 2012 and beyond.

To complete closing, PPL used acquisition financing under a syndicated bridge facility arranged by Bank of America Merrill Lynch and Credit Suisse. The permanent financing plan includes a combination of common stock, equity units and debt. PPL expects to complete the permanent equity financing in the second quarter of 2011 and the debt financing by the end of the year, said the announcement.

PPL subsequently increased its 2011 earnings forecast to $2.50 to $2.75 per share, up from the prior forecast of $2.40 to $2.60 per share, excluding transaction-related costs associated with the acquisition of Central Networks.

Miller further reiterated that PL plans to maintain its common stock dividend at the current annualized level of $1.40 per share, as declared by the company's board of directors on Feb. 25, 2011.

PPL now owns and operates the largest network of electricity delivery companies in the United Kingdom in terms of regulated asset value, at a combined $7.8 billion. PPL Corporation companies now will be providing regulated utility services to about 10 million customers in England, Wales, Pennsylvania, Kentucky, Virginia and Tennessee.

PPL Corporation, headquartered in Allentown, Pa., owns or controls about 19,000 megawatts of generating capacity in the United States, sells energy in key U.S. markets, and delivers electricity and natural gas to about 10 million customers in the United States and the United Kingdom.

The acquisition expands PPL’s U.K. business into a very strategic and core element of its overall regulated utility business platform. Based on the expected contributions of the expanded U.K. operations, the company estimates that nearly three-quarters of its 2013 EBITDA would come from regulated businesses.

3rd April 2011