Avangrid has terminated its previously announced $8.3bn acquisition of PNM Resources owing to regulatory hurdles in New Mexico, US.
The all-cash deal, which included net debt and other adjustments of around $4bn, was announced in October 2020.
Avangrid is a US-based energy services and delivery company owned by Spanish utility Iberdrola while PNM Resources is an energy holding company. Based in New Mexico, PNM Resources provides electricity to over 800,000 homes and businesses in New Mexico and Texas via its regulated utilities PNM and TNMP.
The merger deal secured all the mandated regulatory approvals for its closing by the end of 2022 barring the approval of the New Mexico Public Regulation Commission.
Avangrid said that even with the close of 2023, there is still uncertainty about when the New Mexico Supreme Court will resolve the New Mexico regulator’s denial of the merger and any subsequent regulatory actions.
Due to the absence of all final regulatory approvals by 31 December 2023, which was the specified end date under the merger agreement, Avangrid said that it has decided to terminate the merger agreement. This end date allowed either Avangrid or PNM Resources to terminate the agreement if the merger had not been completed by that time.
Avangrid stated: “While our merger agreement with PNM has been terminated, we remain more than ever steadfast in our commitment to New Mexico in the development of wind and solar renewables, helping explore options in the new hydrogen economy, and delivering on the partnership with the Navajo Nation to achieve its clean energy future.”
PNM Resources said that despite the approval of an extension by its board of directors, Avangrid did not accept it and went ahead with the termination of the merger deal.
PNM Resources chairman and CEO Pat Vincent-Collawn said: “We are greatly disappointed with Avangrid’s decision to terminate the merger agreement and its proposed benefits to our customers, communities and shareholders.
“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%.”
