Macquarie buys National Grid wireless for $4.9 bln

(Adds detail, background)

LONDON, April 3 (Reuters) - Australia's Macquarie Bank MBL.AX has agreed to buy the UK broadcast and mobile phone mast business of British energy network operator National Grid Plc NG.L for 2.5 billion pounds ($4.9 billion) in cash.

National Grid, which had been looking to demerge the unit to focus on its core gas and electricity transmission operations, said on Tuesday it planned to return 1.8 billion pounds of the proceeds to investors by buying back shares.

Macquarie already owns a high proportion of the UK’s transmission masts through its Arqiva business.

A spokesman said it would hold the National Grid business in a separate company, Macquarie UK Broadcast Ventures Ltd, pending approval of the deal by competition regulators.

A source close to the matter told Reuters last week that Macquarie was one of six firms set to make second-round offers for National Grid’s broadcast and mobile phone masts business, with bids then expected to be pitched at about 2 billion pounds.

National Grid, which runs the 4,500 miles (7,240 km) of power lines and 4,300 miles of gas pipelines in the UK, said it expected the deal to close later on Tuesday and to boost earnings immediately.

“This represents a significant step in our strategy of focusing on the UK and U.S. electricity and gas markets, and demonstrates our commitment to generating shareholder value,” National Grid Chief Executive Steve Holliday said in a statement.

At 1350 GMT, National Grid shares were up 1.4 percent at 810 pence, valuing the business at about 22 billion pounds.

((Reporting by Mark Potter, Editing by Ben Hirschler, Paul Bolding

Reuters Messaging: rm://

Tel: +44 20 7542 7717, Fax: +44 20 7542 9025))

($1=.5061 Pound) Keywords: NATIONAL GRID UK MASTS/

C Reuters 2007. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nL0324322