The group, which manages the UK’s power infrastructure, said it will buy Western Power Distribution (WPD) from US energy giant PPL Corporation.
In a separate transaction, National Grid will also sell its Rhode Island utility business – The Narragansett Electric Company – to PPL for 3.8 billion US dollars (£2.7 billion).
National Grid – the company that helps keep Britain’s lights on – said it will launch a process later this year to sell a majority stake in National Grid Gas (NGG) as it looks to boost its electricity assets from around 60% to about 70% of its overall portfolio.
John Pettigrew chief executive of National Grid, said: “These transactions will be transformational for our UK portfolio.
“The acquisition of WPD is a one-off opportunity to acquire a significant scale position in UK electricity distribution.
“Our vision for National Grid remains unchanged, to be at the heart of a clean, fair and affordable energy future.
“With increased exposure to the UK’s electricity sector, these transactions enhance our role in the progress towards net zero, underpinning our core ambition which is to enable the energy transition for all.”