Acquisition

National Grid Transco PLC
28 June 2004







EMBARGOED UNTIL 11.30 AM     28 June 2004


                        NATIONAL GRID TRANSCO ANNOUNCES

                         ACQUISITION OF CROWN CASTLE UK


  • UK operations of Crown Castle acquired for cash consideration of £1.1bn*


  • In line with NGT's strategy to exploit its network management skills

  • Places NGT in a leading position in the growing mobile and broadcast
    infrastructure markets


  • Pre-synergies: cashflow enhancing immediately; earnings enhancing** in the
    first full year after completion

  • Integration savings £18m per annum from combination with Gridcom UK


National Grid Transco plc ('NGT') today announces that it has reached agreement
on the terms of an acquisition of the UK operations of Crown Castle
International, Inc. ('Crown Castle UK') for a cash consideration of around £1.1
billion *.


NGT will merge Crown Castle UK with Gridcom, its wholly owned subsidiary,
creating a combined business that will be the major independent provider of
infrastructure to the mobile telecommunications operators in the UK, with a
substantial portfolio of almost 5,000 active sites. Crown Castle UK is also one
of the two providers of infrastructure for transmission of terrestrial analogue
and digital television and radio in the UK and is particularly well positioned
for the move towards digital television. The new business will initially trade
under the 'Crown Castle UK' brand name.


For the year ended 31 December 2003, Crown Castle UK had earnings before
interest, tax, depreciation and goodwill amortisation of £101 million*** on
revenues of £233 million and had net assets of £337 million.


* the total consideration of $2,035 million is subject to normal completion
adjustments less an amount reflecting customer prepayments. This adjusted USD
amount has already been bought forward and is expected to amount to around
£1.1bn. Consideration will be satisfied by general corporate debt.


** before goodwill amortisation and exceptional items


    *** adjusted to exclude £5 million of management fees payable to Crown
    Castle International, Inc. and share option expenses




Roger Urwin, Chief Executive of NGT, said:

'Crown Castle UK is a high quality infrastructure business with low risk
characteristics. It is a natural extension of our own towers and sites business,
Gridcom, and is clearly consistent with National Grid Transco's core focus on
owning, operating and managing networks. Combining Crown Castle UK with Gridcom
will, we believe, create value from integration savings and the opportunities
presented by growth in the mobile and broadcast infrastructure markets.'

John Kelly, Chief Executive of Crown Castle International, said:

'We are proud of the success of our UK operations but recognise that this is the
right time for us to realise the value we have created so that we can focus our
attention and resources on growth opportunities in the US. In National Grid
Transco we have found an excellent long term owner of the business, for the
benefit of its customers and employees.'


Acquisition benefits


The acquisition of Crown Castle UK:


  • makes NGT a leader in the growing mobile and broadcast infrastructure
    markets while exploiting NGT's core skills of owning, managing and
    maintaining network infrastructure;


  • is expected to enhance NGT's cash flow per share immediately following
    completion without taking account of synergies;


  • is expected to enhance NGT's earnings per share (before goodwill
    amortisation and exceptional items), excluding the benefits of synergies, in
    the first full financial year after completion; and


  • provides significant opportunities to create value from the combination of
    Gridcom and Crown Castle UK:


  • NGT plans to achieve annualised cost savings of £18 million in the mobile
    infrastructure business by the end of the first full financial year. These
    represent some 11 per cent of the enlarged business' controllable cost base;
    and


  • the increased scale and broader portfolio of undeveloped mobile sites
    strongly positions the business to exploit the expected growth in the mobile
    infrastructure market.




Management


Peter Abery, currently CEO of Crown Castle UK, will become CEO of the enlarged
business following completion of the transaction. Steven Marshall, currently CEO
of Gridcom UK, will become COO with responsibility for managing the integration
process. Andrew Sloey, currently Finance Director of Crown Castle UK will become
Finance Director of the enlarged business.


Approval process


The acquisition is conditional upon approvals from the Office of Fair Trading
and from the US Federal Communications Commission, and upon certain change of
control consents. Completion is expected to take around 3 months.




Bear Stearns International acted as the financial adviser to NGT on the
transaction. In addition, Rothshild provided independent valuation advice to the
Board of NGT.

Contact details


National Grid Transco:
Investors
Alexandra Morton                        [phone]               [phone](m)
Terry McCormick                         [phone]               [phone](m)
Louise Clamp                            [phone]               [phone](m)

Media
Clive Hawkins                           [phone]               [phone]

Citigate Dewe Rogerson                  [phone]
Anthony Carlisle                        [phone](m)



An analyst presentation will be held at Cazenove, 20 Moorgate, London EC2R 6DA
at 2.15pm for 2.30pm (UK time) today.


Live telephone coverage of analyst presentation - password National Grid Transco
Dial in number                                              [phone]


Telephone replay of the analyst presentation (available until 12 July 2004)
Dial in number                                               [phone]
Replay account number                                        963158
Recording number                                             6999516


Live webcast of presentation will also be available at www.ngtgroup.com


Photographs are available on www.newscast.co.uk


Cautionary statement

This announcement contains certain statements that are neither reported
financial results nor other historical information. These statements are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Because these forward-looking statements are subject to assumptions,
risks and uncertainties, actual future results may differ materially from those
expressed in or implied by such statements. Many of these assumptions, risks and
uncertainties relate to factors that are beyond National Grid Transco's ability
to control or estimate precisely, such as delays in obtaining or adverse
conditions contained in regulatory approvals, competition and industry
restructuring, changes in economic conditions, currency fluctuations, changes in
interest and tax rates, changes in energy market prices, changes in historical
weather patterns, changes in laws, regulations or regulatory policies,
developments in legal or public policy doctrines, technological developments,
the failure to retain key management, the availability of new acquisition
opportunities or the timing and success of future acquisition opportunities.
Other factors that could cause actual results to differ materially from those
described in this announcement include the ability to integrate the US and UK
businesses acquired by or merged with National Grid Transco or to continue to
realise the expected synergies from such integrations, the failure for any
reason to achieve reductions in costs or to achieve operational efficiencies,
unseasonable weather impacting on demand for electricity and gas, the behaviour
of UK electricity market participants on system balancing, the timing of
amendments in prices to shippers in the UK gas market, the performance of
National Grid Transco's pension schemes and the regulatory treatment of pension
costs, the impact of any potential separation and disposal by National Grid
Transco of any UK gas distribution network(s) and any adverse consequences
arising from outages on or otherwise affecting energy networks owned and/or
operated by National Grid Transco. For a more detailed description of these
assumptions, risks and uncertainties, together with any other risk factors,
please see National Grid Transco's filings with the United States Securities and
Exchange Commission (and in particular the Directors' Operating and Financial
Review section filed with its most recent Annual Report on Form 20-F).
Recipients are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this announcement. National Grid
Transco does not undertake any obligation to publicly release any revisions to
these forward-looking statements to reflect events or circumstances after the
date of this announcement.





Notes to Editors


National Grid Transco


NGT is an international network infrastructure business, whose principal
activities are in the regulated transmission and distribution of electricity and
gas. In the UK it owns and operates the high-voltage electricity transmission
network in England and Wales, and Britain's natural gas transportation system.
In the US it is one of the top ten electricity companies, with the largest
electricity transmission and distribution network in the New England/New York
region.


Prior to the merger which formed NGT (the 'Merger'), National Grid and Lattice
had separately been using their own networks to develop site rental businesses
that provided infrastructure to mobile telecommunication operators under the
Gridcom and SST brands. Following the Merger, National Grid's and Lattice's
businesses were combined to create Gridcom UK. Under a new management team led
by Steven Marshall, CEO, Gridcom UK has seen a marked improvement in its market
position and profitability. Gridcom UK is now the third largest independent
mobile infrastructure provider in the UK with c.1,400 active sites and c.2,800
tenants.




Crown Castle


Crown Castle International Corp. engineers, deploys, owns and operates
technologically advanced shared wireless infrastructure, including extensive
networks of towers and rooftops. The company offers wireless communications
coverage to 68 of the top 100 United States markets and to more than 92 percent
of the Australian population. Crown Castle International owns, operates and
manages over 10,600 and over 1,300 wireless communication sites in the US and
Australia, respectively.


Crown Castle UK, headquartered in Warwick, was formed in 1997 following the
privatisation of BBC Home Service Transmission Division.


Crown Castle UK is the leading independent provider of infrastructure to the
mobile telecommunications operators in the UK. Independent players have entered
this market in the past 7 years and now have an overall market share of 18%, the
remainder still being provided by the mobile operators. With c.3,500 active
sites and c.10,200 mobile tenants, Crown Castle UK is the leading provider
amongst the independent players.


It is also one of the two providers of terrestrial infrastructure for the
transmission of analogue and digital television and radio broadcasts in the UK,
owning some c.750 towers and associated transmission equipment and managing the
transmission network. In addition to traditional analogue services, Crown Castle
UK has a strong position in the growing digital television market, owning 2 of
the 6 licences and providing infrastructure services to all the Freeview
channels and the BBC and BSkyB.


In the mobile infrastructure market, capacity expansion of 2G and the build out
of 3G networks are expected to drive substantial growth in the number of mobile
tenants over the next five years. The potential for outsourcing by the mobile
telecommunication operators and the development of new technologies should
provide further growth opportunities. In the broadcast infrastructure market,
growth is expected to be driven by extended geographic coverage, increasing
household penetration of digital television services and an increasing number of
digital television channels as switch-off of the analogue television signal
occurs.


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