A French utility has agreed to buy the owner of the electricity cables and power lines across London, the south-east and the east of England in a deal worth £10.5bn.

Paris-headquartered Engie said on Wednesday that it had struck a deal to buy UK Power Networks (UKPN) in a “major milestone” for the company’s ambition to become the “best energy transition utility”.

Engie will buy the electricity network operator, which operates about 192,000km of power lines serving 8.5 million customers across London and southern and eastern England, from a Hong Kong-based conglomerate founded by billionaire business magnate Li Ka-shing, which has owned UKPN for the past 15 years.

The chief executive of Engie, Catherine MacGregor, said: “The acquisition of UK Power Networks marks a major milestone in the implementation of our strategic priorities.

“By reinforcing our position in electricity networks, it confirms our ambition to become the best energy transition utility and will support our growth momentum while improving our risk profile.”

The deal has emerged almost a year after the UK’s competition watchdog cleared Spain’s Iberdrola to buy an 88% stake in Electricity North West (ENW), through its UK subsidiary Scottish Power, in a deal that valued the network at £5bn. ENW, which served almost 5 million people in the north-west of England, has been rebranded SP Electricity North West.

Britain’s electricity distribution network companies, which operate the electricity lines and infrastructure across six geographical monopolies, are about halfway through a plan to invest more than £22bn in upgrading and expanding their networks by 2028 under the five-year programme approved by the industry regulator.

The investments, which are paid back via energy bills, are considered crucial if Britain hopes to connect enough new low-carbon generation, batteries and electric vehicle charge points to help meet the UK’s goal of reducing its use of fossil fuels in favour of green electricity.