Iberdrola-owned Avangrid has acquired US energy company PNM for an approximate enterprise value of €6.9bn.
This friendly transaction, recommended by PNM’s board of directors, will be effected via merger.
Under the deal PNM’s shareholders will receive €3.6bn in cash with net debt plus other adjustments of approximately €3.3bn.
The purchase price represents a premium of 10% over the PNM`s share price as of 20th October and 19.3% over the average PNM share price during the 30 days prior to prior to 21st October.
The combination of Avangrid and PNM, with over 4.1 million points of supply, regulated asset base (RAB) of $€12bn, more than 168,000 km of networks and approximately 10.9GW of installed capacity (as of 2019), will accelerate Iberdrola Group’s growth in the US.
The agreement between Avangrid and PNM, is subject to approval by PNM shareholders.
As PNM and its subsidiaries operate in a regulated sector, the relevant authorizations at state level (New Mexico Public Regulation Commission and Public Utility Commission of Texas) and Federal level (Federal Energy Regulatory Commission, Hart Scott Rodino Clearance, Committee on Foreign Investment in the United States, Federal Communications Commission and Nuclear Regulatory Commission) will be required.
This process is expected to be completed in 2021.
Iberdrola chief executive and chairman Ignacio Galán (pictured) said: “The operation aligns to the strategy we have followed for more than 20 years.
“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.”
Iberdrola currently owns 1900MW of renewable energy and a pipeline of 1400MW renewables assets in New Mexico and Texas.
Meanwhile, Iberdrola’s Q3 results show net profit rose by 4.7% to €2.68bn – the adjusted figure increased by 8.8% – and adjusted EBITDA rose by 3.2% to €7.56bn.
Investments in renewables grew by 52% as of September and represent 54% of the €6.64bn capital expenditure in the period.
The group has added 4.6GW of capacity in the last twelve months – almost 1.3GW in the third quarter- and is progressing construction of another 7.6GW.
Network investments increased by 5.5% and account for 38% of the total.
It’s global project pipeline stands at over 700GW.