ESB has agreed to buy Northern Ireland Electricity (NIE) from the Viridian Group for €1.2 billion.
Under the deal, ESB will also acquire associated companies that provide electrical construction and maintenance services, including NIE Powerteam Ltd and Powerteam Electrical Services (UK) Ltd.
If the transaction is approved by competition authorities, the State company will own both grids on the island which are interconnected and part of a single electricity market.
ESB will also assume obligations of the NIE Group, including those under a €211 million Eurobond.
The deal is expected to be completed by the end of the year. NIE will continue to operate as a stand-alone business, and will retain its brand.
NIE owns the electricity transmission and distribution network in Northern Ireland. It is responsible for the planning, development, construction and maintenance of the network, and the operation of the distribution network.
The Northern Irish domestic electricity market was recently opened to competition when rival Airtricity recently began selling electricity to householders in Northern Ireland. Airtricity already operates in the Republic's domestic electricity market as a rival to ESB and Bord Gáis.
ESB chief executive Padraig McManus said the company was committed to delivering the significant investment in Northern Ireland’s transmission and distribution networks needed to deliver common energy sustainability policy objectives over the coming years.
The NIE Group employs about 1,300 people. Speaking on RTÉ's Morning Ireland, Mr McManus said ESB would not be seeking redundancies in the company.
Northern Ireland's energy minister Arlene Foster said she had met with both NIE and ESB about the proposed sale, and had also discussed it with the regulator and Minister for Communications and Energy Eamon Ryan.
“I have received assurances from ESB on a range of issues relating to the transaction. These include ESB investment plans, the importance of securing existing jobs, and maintaining the identity of the electricity network business in Northern Ireland," she said.
"I will continue to keep a close watch as the transaction proceeds towards completion, to ensure the interests of electricity consumers in Northern Ireland are being properly considered."
She said governments in on both sides of the border had committed to increasing the levels of renewable power generation, which would require significant strengthening of the grid.
She welcomed ESB's assurances of its commitment to fund and construct the infrastructure in Northern Ireland, in addition to delivering on similar commitments in the Republic.
Mr Ryan also welcomed the deal, saying it represented a good outcome for the future development of low-carbon energy infrastructure on the island.
"I am confident that this investment by the ESB will be to the benefit of both economies in terms of potential synergies and will critically underpin the delivery of the ambitious renewable energy targets set by both administrations," he said. "Security of energy supply is critical for business and consumers, and continued cost efficient development of the networks will ensure that we have secure environmentally sustainable energy supply for the long-term."
However, leader of the TUV Jim Allister said the sale would be a "retrograde step".
"This proposed sale is bad news for Northern Ireland and, therefore, I am dismayed by the DETI Minister's compliant response. It will leave the government of the Republic of Ireland with a dominant position in almost every aspect of energy generation, supply, distribution and retail across the island. It makes a nonsense of all British and European policy regarding the unbundling of energy network and the promotion of competitive markets," he said.
