Spanish utility company Iberdrola announced today its agreement to purchase the remaining minority stake in its US subsidiary Avangrid, marking a strategic move to strengthen its foothold in the American energy market.
The acquisition, approved by Avangrid's Board of Directors following the recommendation of an independent committee, entails Iberdrola acquiring an 18.4% stake at $35.75 per share, a notable increase from its initial proposal.
“Iberdrola will acquire the additional capital for US$35.75 dollars per share,” according to the company's filing with the National Securities Market Commission (CNMV). This price represents an improvement over Iberdrola's original proposal (US$34.25 per share).
With Iberdrola already owning approximately 81.6% of Avangrid, this move represents a substantial investment totaling US$2.551 billion (€2.348 billion).
Upon completion of the transaction, efforts will be made to delist Avangrid shares from the New York Stock Exchange, subject to necessary approvals.
Both Avangrid and Iberdrola Boards of Directors have unanimously approved the agreement, signifying alignment in strategic objectives.
The transaction underscores Iberdrola's aim to bolster its presence in the US networks business, particularly amid a pivotal juncture for the company.
“The objective of this transaction is to increase exposure to the networks business in the United States at a key moment for Iberdrola,” the company stated.
However, the completion of the deal is contingent upon requisite shareholder approval and regulatory clearance from entities such as the Federal Energy Regulatory Commission and state regulatory commissions of New York and Maine.
Avangrid, headquartered in Connecticut, boasts assets worth US$44 billion and operates across 24 states in the US. The company's primary operations span the networks and renewable energy sectors.
Its networks business encompasses eight electric and natural gas companies, serving over 3.3 million customers in New York and New England, while its renewable energy portfolio includes various generation facilities throughout the country.
Avangrid, with its workforce of 8,000 employees, reported an adjusted gross operating profit (EBITDA) of US$2.43 billion in 2023, underlining its financial robustness and market presence.
