National Grid may buy UK phone masts for $2 billion

Britain's National Grid Transco is in talks to buy UK mobile phone and TV broadcast masts from US firm Crown Castle in a deal analysts say may cost about $2 billion and boost growth at the utility.
If a deal is clinched, National Grid would more than triple its network of masts transmitting mobile phone and TV broadcast signals and expand in a business that potentially offers higher growth than the heavily regulated power sector.
"NGT confirms it has entered into discussions with Crown Castle," National Grid Transco said in a statement on Friday, responding to recent media speculation.
NGT, the UK's main gas and power network operator, has steadily grown its mobile phone mast network to about 1,400, with customers such as Orange and Vodafone.
Analysts say any purchase now of Crown's UK network of over 3,500 towers would boost its share of the domestic tower and mast business to nearly 10 percent from about three percent now.
"I'd have thought there are considerable synergy savings from this acquisition; it's a good fit to their current business of operating masts and wires," said Brewin Dolphin analyst Elaine Bucknell.
"They have hinted they want to expand their telecoms infrastructure, and they certainly have the cash available," she said, noting the acquisition could cost about $2 billion. The Financial Times and the Wall Street Journal reported earlier that NGT was keen to buy Houston-based wireless communications company Crown Castle's UK towers business for up to 1.1 billion pounds ($2 billion).
NGT shares were down by half a percent at 431 pence by 1125 GMT, trimming earlier losses.
The newspaper reports said the potential purchase appeared not to be linked to the utility's imminent sale of some UK gas networks for up to five billion pounds.
Bids for the networks closed this week, and investors are hoping some of the proceeds will be returned to shareholders, rather than funnelled into big-ticket acquisitions.
Neither of the two companies returned calls seeking additional comment. "They would have to raise a billion pounds to fund the deal and, that said, there still is scope for money to be returned to shareholders," Bucknell said.