Iberdrola has agreed to acquire a stake of 88% in British electricity distribution network operator Electricity North West (ENW) in a deal worth £2.1bn.
The acquisition is in line with Iberdrola’s strategy to invest in electricity networks and in countries with a strong credit rating. It values 100% of Electricity North West, including debt, at around €5bn.
Electricity North West is situated between the two existing ScottishPower networks licence areas, in central and southern Scotland and Merseyside and North Wales.
It operates approximately 60,000km of electricity distribution networks, supplying power to about five million people in the North West of England. The cities it serves include Manchester, Lancaster, and Barrow.
The remaining 12% stake in Electricity North West will be held by a consortium of Japanese investors led by Kansai. Iberdrola has also signed a shareholders’ agreement with the consortium to ensure long-term collaboration.
Following the closing of the proposed deal, Iberdrola will establish the UK as its leading market by regulated asset base valued at nearly €14bn, followed by the US at €13.3bn.
Through the acquisition, Iberdrola will also become the second largest electricity network operator in the UK.
The Spanish energy company will distribute electricity to nearly 12 million people in the UK with a network spanning over 170,000km.
Besides, Iberdrola plans to employ more than 8,500 people in the country.
Iberdrola executive chairman Ignacio Galán said: “This transaction reinforces our commitment to investing significantly in electricity networks, which are a critical component for supporting the electrification and decarbonisation of the economy.
“The agreement is also consistent with our strategy to invest in countries that have ambitious investment plans and stable and predictable regulations. As a result of this acquisition, our regulated networks asset base in the UK is now valued at €14bn.”
Iberdrola stated that the UK has been a major investment focus for the company since its merger with green integrated utility ScottishPower in 2007. The company has invested around £30bn in the country.
The transaction is contingent upon standard authorisations.
In May 2024, Iberdrola agreed to acquire the remaining 18.4% stake in its US-based subsidiary Avangrid, which it previously did not own. This acquisition, valued at $2.55bn, will result in Iberdrola taking full ownership of the company.
