The completion of the sale of SSE’s remaining 33.3% stake in SGN marked the final step in a strategic disposals programme announced in June 2020 to streamline the Group and sharpen its focus on net zero. The sale in March realised nearly £1.3bn in cash proceeds. SGN had been a good
investment for the Group, delivering a return on investment of over 18% from an initial outlay in 2005 of £505m for a 50% stake, however it had become a purely financial interest less aligned with the Group’s focus on electricity. The disposals programme overall achieved headline consideration of over £2.8bn, significantly in excess of the original £2bn target.
Gas networks are no longer part of SSE’s strategic plans, but regulated electricity distribution and transmission networks businesses continue to be key drivers of net zero and engines of growth for the Group. Plans were outlined in the Net Zero Acceleration Programme to sell minority stakes in SSEN Transmission and SSEN Distribution, extending a partnering approach that has worked well in SSE Renewables to networks to fund growth and unlock opportunities across the Group. These plans are now progressing with a sales process initiated with banking advisers in Spring 2022 on a 25% share in SSEN Transmission.
While these are high-quality, strategically important businesses and SSE will retain control, the scale of potential growth and the associated investment required mean that bringing in minority partners will create greater long-term value by enabling SSE to harness this significant growth whilst maintaining an attractive balance of capital allocation across the Group.