October 21, 2020 Read More →

Spain’s Iberdrola makes $4.3 billion cash bid for PNM Resources in New Mexico

Reuters:

Spain’s Iberdrola announced a deal worth $8.3 billion including debt on Wednesday, adding PNM Resources to its Avangrid business to create the third-largest U.S. renewable energy operator. Absorbing PNM into Avangrid will create an operator present in 24 states, Iberdrola said, and bring together firms with a combined market value topping $20 billion.

PNM’s board unanimously approved the $4.3 billion offer to its shareholders of $50.3 per share, the filing said. Iberdrola expects the deal to close in 2021 and start boosting financial results from the first year.

Active in New Mexico and Texas, PNM gives Avangrid a route to expand its regulated business beyond the U.S. northeast. PNM could also benefit from Avangrid’s renewables experience as it works to cut emissions. A plan has now been approved to close its coal-fired San Juan plant in 2022, Iberdrola said.

Iberdrola said the merged company would have assets worth $40 billion, generate core earnings of around $2.5 billion and net profit of $850 million.

This is Iberdrola’s eighth deal this year as part of a 10 billion euro ($11.85 billion) investment drive of which it has already spent more than 6.6 billion euros. It has shopped for assets in France, Australia and Japan.

CEO Ignacio Galan said his strategy consisted of: “Friendly transactions, focused on regulated businesses and renewable energy, in countries with good credit ratings and legal and regulatory stability, offering opportunities for future growth”.

[Isla Binnie]

More: Iberdrola, PNM to create $20 billion U.S. clean powerhouse

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