Avangrid (AGR), a US-based energy operation unit of Spanish utility Iberdrola, has signed an agreement to acquire US-based PNM Resources (PNM) for an enterprise value of approximately $4.3bn.
Under the terms of the merger deal, PNM’s shareholders will receive $50.30 cash per share for each share held at closing. This implies an approximately $8.3bn of enterprise value considering a net debt and other adjustments of approximately $4bn.
Upon completion of the deal, PNM will be integrated into Avangrid, creating larger, more diversified regulated utility and renewable energy company in the US.
Iberdrola chairman and CEO and Avangrid chairman Ignacio Galán 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”.
Combined entity to have 10.9GW of installed capacity
The combined entity will have a regulated asset base (RAB) of $14.4bn, more than 168,000km of networks and approximately 10.9GW of installed capacity.
PNM Resources president and CEO, chairman Pat Vincent-Collawn said: “Our combined companies provide greater opportunities to invest in the infrastructure and new technologies that will help us navigate our transition to clean energy while maintaining our commitments to our local teams and communities.”
Planned to be completed in December 2021, the transaction is subject to PNM Resources shareholder approval, regulatory approvals and other customary closing conditions.
This is Iberdrola’s eighth deal in 2020 followed by acquisitions in France, Australia and Japan as part of its expansion plan.
PNM has also reiterated its commitment abandon San Juan Generating Station in 2022 and as well as divest its 200MW ownership stake in the Four Corners Power Plant.
In July, Avangrid Renewables, a subsidiary of Avangrid, has agreed to sell 85% of its stake in the 155MW Tatanka Ridge wind farm.
