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SSE, the UK energy company, will dispose of a 16.7 per cent stake in SGN, the gas distribution company to the Abu Dhabi’s sovereign wealth fund for £621m.

In a statement on Monday, SSE said it was looking to complete the deal by the end of the month with the Abu Dhabi Investment Authority which will be settled in cash. SSE will provide an update on what it will do with the proceeds early next month.

The company has been looking for ways to dispose of its 50 per cent stake in SGN, acquired in 2005. It will retain a 33 per cent stake following the deal with the Gulf state’s sovereign wealth fund.

Alistair Phillips-Davies, chief executive said:

The sale of a 16.7% stake confirms SSE’s ability to deliver value for shareholders through focused, timely disposals while at the same time retaining a diverse range of regulated and unregulated businesses in order to support long term dividend growth.