A merger agreement between Iberdrola’s US subsidiary Avangrid and PNM Resources has been terminated.
Avangrid and PNM had obtained all the necessary regulatory approvals for the closing of the merger by the end of 2022 except the approval of the New Mexico Public Regulation Commission.
The companies’ merger agreement, announced in October 2020, had been extended through 31 December 2023, while awaiting a decision from the New Mexico Supreme Court on the January 2022 appeal of the New Mexico Public Regulation Commission decision denying the transaction.
The potential merger deal has been valued at $8.3bn, including debt.
According to Avangrid, which terminated the agreement, with the close of 2023 there was “still no clear timing on the resolution of the court review of the New Mexico regulator’s denial of the merger nor any subsequent regulatory actions”.
In a statement it said: “Avangrid has terminated the merger agreement because all final regulatory approvals were not received by December 31, 2023, the end date under the merger agreement after which either Avangrid or PNM could terminate the merger agreement if the merger had not yet been consummated.
“In connection with the termination of the merger agreement, the commitment letter, pursuant to which Iberdrola agreed to provide or arrange for funds to the extent necessary for Avangrid to consummate the merger, terminated automatically by its terms.”
“Since 2020, Avangrid, a national leader in clean energy, has fought to gain approval of its merger with PNM, a merger that would bring over $300 million in benefits to PNM consumers and communities and utilize the company’s vast experience, and the experience of Iberdrola, S.A., a global leader at the forefront of the energy transition, to help the state achieve its clean energy goals.”
In a statement published by PNM Resources, Pat Vincent-Collawn, PNM Resources Chairman and CEO, said: “We are greatly disappointed with Avangrid’s decision to terminate the merger agreement and its proposed benefits to our customers, communities and shareholders,” said
“As we move forward, our strategic plans remain focused on the infrastructure investments necessary to meet the future energy needs of our customers and communities.
“We look to build upon our strong track record of delivering financial results and continue to target long-term earnings growth of 5%.”