Iberdrola has agreed to take full ownership of its US-based subsidiary Avangrid by acquiring the remaining 18.4% stake it previously did not own in the latter for $2.55bn.
Under the terms of the agreement, the Spanish electric utility will pay Avangrid’s shareholders $35.75 per share to buy out the remaining shares of Avangrid, which is a renewable energy developer based in Connecticut.
The consideration represents a premium of 11.4% over the closing price of Avangrid common stock on 6 March 2024 and a 15.2% premium over the volume-weighted average price of Avangrid common stock over the 30 trading days.
Currently, Iberdrola holds around 81.6% of Avangrid’s capital.
Through the acquisition, Iberdrola aims to expand its presence in the networks sector within the US. Iberdrola is prioritising growth in markets having robust credit ratings and in regulated sectors such as networks.
Upon the completion of the transaction, a formal request will be submitted to delist Avangrid shares from the New York Stock Exchange (NYSE).
Presently, Avangrid has $44bn in assets and operates in 24 US states. The company focuses on two primary business areas, which are networks and renewables.
In the networks sector, Avangrid supervises eight electric and natural gas companies, serving more than 3.3 million customers in New York and New England.
Simultaneously, in the renewables sector, the company oversees a diverse portfolio of renewable energy generation facilities across the US.
Avangrid CEO and president Pedro Azagra said: “We are excited about Iberdrola’s continued investment in Avangrid and commitment to the United States.
“As a wholly-owned member of the Iberdrola Group, we will continue to serve our customers and build our renewable energy assets work to achieve our vision to lead the clean energy transition with a strong commitment to sustainability, community, governance, and our employees.”
Subject to customary conditions, including shareholders and the Federal Energy Regulatory Commission (FERC), the Maine Public Utilities Commission and the New York Public Service Commission approvals, the deal is expected to be complete in Q4 2024.
