Macquarie Asset Management (MAM) and Federated Hermes currently own 26% and 13% stakes, respectively, in Cadent. Credit: Gwoeii/shutterstock.com.

Australia’s MAM and Federated Hermes, a US-based investment firm, are considering divesting approximately £1.3bn ($1.64bn) worth of combined stakes in UK gas distribution company Cadent, reported the Financial Times.

The asset management division of Macquarie Group, MAM currently holds a 26% share in Cadent.

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MAM is in preliminary discussions to divest around a 5% stake, according to two people close to the discussions.

Federated Hermes is planning to sell a 4.6% stake from its current 13% ownership.

The latest move comes amid the UK’s efforts to reduce natural gas usage to achieve net-zero carbon emissions by 2050.

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Cadent operates around half of the local gas distribution networks in the UK, delivering gas to 11 million homes and businesses throughout the East of England, East Midlands, North London, North West, South Yorkshire and West Midlands.

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Despite the proposed sale, Federated Hermes said that the company remained a “committed and supportive long-term investor” in Cadent.

Federated Hermes stated: “We believe that the company will continue to play an instrumental role in the UK’s energy transition”.

Last month, Reuters reported that CEZ and CVC Capital Partners plan to submit competing bids for a stake in the Czech Republic’s primary gas distribution network, GasNet.

GasNet is owned via Czech Gas Network Investments by a consortium led by MAM.

The consortium includes British Columbia Investment Management Corporation and Allianz Capital Partners. 

Said to be a critical asset, covering all regions except Prague and South Bohemia, GasNet caters to 2.3 million customers through a pipeline network spanning 65,000km.