Iberdrola to buy out Avangrid in $2.6 B deal
The agreement comes after Avangrid abandoned an $8.3 billion deal to acquire US competitor PNM Resources in January.
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USA, New York: Spanish utility Iberdrola will acquire the remaining 18.4% stake in Avangrid that it does not already own, in an all-cash deal worth about $2.6 billion. The agreement comes after Avangrid abandoned an $8.3 billion deal to acquire US competitor PNM Resources in January, as it couldn’t secure approval from New Mexico’s utility regulator three years after it announced the plan.
Iberdrola will pay $35.75 per share for the outstanding Avangrid stock, and the transaction is expected to close in the fourth quarter. The deal price is below the $37.53 level at which the stock ended trading on Thursday. Avangrid’s stock dropped 4.7% to $35.78 when it restarted trading on Friday afternoon.
Iberdrola, which is one of Europe’s largest power companies, said the deal would increase its exposure to its US business, which it is seeking to grow. Avangrid operates renewable power assets in 24 states and serves 3.3 million customers in New York and New England through regulated utility operations.
It began trading as an independent company in December 2015, following the merger of Iberdrola USA and UIL Holdings Corporation. Iberdrola plans to invest €41 billion ($44.57 billion) over the next three years, with a focus on upgrading and expanding power grids in the United States.
Source: Reuters