EDF sells UK power network

The UK's biggest electricity network is to be acquired by infrastructure fund Cheung Kong, which is controlled by Hong Kong billionaire Li Ka-shing and is the current owner of UK distribution firm Northern Gas Networks.

The deal price, which includes debt, is higher than expected after Cheung Kong and its partner Hong Kong Electric Holdings reportedly outbid funds such as the Abu Dhabi Investment Authority and Australia's Macquarie.

Long-term investors such as pension funds are attracted to assets such as utilities and power distribution networks due to their reliable income stream. Several such companies changed hands before the credit crunch struck.

Distribution companies operate and maintain the electrical supply system in particular areas. The EDF network serves around 7.8 million customers and has 170,000 kilometres of underground cables and overhead lines and 66,300 substations.

EDF, which owns the network through its UK subsidiary EDF Energy, bought British Energy for more than 12bn last year and wants the sale to cut around 4.6bn from its debts by the end of 2010.