Britain's National Grid has agreed to buy US natural gas distributor KeySpan for around $7.3 billion in cash in a major tie-up it says can generate savings of $200 million a year.
The UK power-network and gas-pipeline operator today confirmed the deal also involved taking on $4.5 billion of debt.
It hopes to close the deal early next year. The move comes less than a year after it sold half its UK gas-distribution assets for £5.8 billion, raising money to return £2 billion to shareholders and invest in US markets.
National Grid has long planned to expand in the US northeast, and last week National Grid agreed to buy the Rhode Island utility assets of Southern Union for nearly $500 million.
The British company said it was buying New York-based KeySpan for $42 cash per share and would fund the deal from borrowings. The stock closed at $41.41 on Friday.
National Grid said cost savings of $200 million, half of which it expects to make after the first year, would come from reductions in back-office overlap and IT cost savings.