French utility Engie has struck a £10.5 billion ($14.2bn) deal to acquire UK Power Networks (UKPN), the UK’s largest electrical distribution network operator (DNO).

UKPN has three distribution licenses covering London, the South East, and the East of England, spanning more than 192,000km (119,303 miles).

It plays a crucial role in powering the country’s data center sector, offering specialized services for high-voltage and end-to-end connections.

In November, UKPN became the first DNO to partner with the Data Centre Alliance, aimed at speeding up, simplifying, and making grid connections for data centers more flexible.

According to Engie, the transaction was made as part of its efforts to rebalance its infrastructure activities toward regulated electricity networks.

Catherine MacGregor, Engie CEO, said: “The acquisition of UKPN represents a decisive step in strengthening Engie’s position as the best energy transition utility.

“It is fully aligned with our ambition to become a key player in regulated electricity network infrastructures, which are essential for energy security, demand electrification, and greater system flexibility.

“This transaction will both enhance the Group’s growth trajectory and reduce our risk profile, providing more visibility on future earnings. It also enables us to reinforce our position in the United Kingdom, a key country with a stable regulatory framework and clear decarbonization targets.”

The company will finance the acquisition through a combination of debt and hybrid issuance for €5bn ($5.87bn), and a disposal program of €4bn ($4.69bn) by 2028. The Group also intends to raise up to €3bn ($3.5bn) in equity through an accelerated book building.

Completion of the acquisition is expected by mid 2026, subject to regulatory approval.

“This transaction marks an important milestone in the history of UKPN and for all its employees,” said Basil Scarsella, UK Power Networks CEO.

“By joining Engie, we continue to be part of a global energy leader with the financial strength, industrial capabilities, and long-term vision to support our next phase of development as UKPN embarks on a period of significant investment in our network to enable economic growth in London, the South East, and the East of England. It will reinforce our ability to serve our 8.5 million customers with the highest standards of safety, customer service, and reliability.”

Over recent years, UKPN has begun trialing AI tools to improve its network. In January of last year, the DNO completed the UK’s first smart substation in Maidstone, Kent. The substation is part of the operator’s Constellation trial, which aims to install powerful computers in existing substations to better analyze power flow, redirect energy, optimize infrastructure, and accommodate future needs.

Headquartered in Paris, France, Engie is one of the world’s largest renewable energy operators, with more than 57GW of total installed renewable and battery storage capacity. The company has signed numerous deals with data center firms to supply power and services.

Most recently, it expanded a carbon-free energy partnership with Google in Germany until 2030.