Iberdrola has agreed to buy the remaining 18.4% interest in Avangrid that it does not already hold, the U.S. subsidiary said on Friday, in an all-cash transaction worth around $2.6 billion.
The arrangement comes after Avangrid abandoned a $8.3 billion bid to acquire US competitor PNM Resources (PNM.N) in January after failing to obtain clearance from New Mexico’s utility regulator more than three years after unveiling the plan.Iberdrola will pay $35.75 per share for Avangrid’s outstanding stock, with the transaction scheduled to completion in the fourth quarter, according to the company’s statement.
The report confirmed a Reuters story published earlier on Friday, which stated that Iberdrola and Avangrid were in advanced talks for a transaction at that price, citing people familiar with the situation who spoke on condition of anonymity.The sale price is lower than the $37.53 level at which the stock closed trading on Thursday. Avangrid’s stock fell 4.7% to $35.78 when trading resumed on Friday afternoon.
However, it represents a slight increase from the $34.25 per share offer made by Iberdrola to take out Avangrid in March, as well as a 11.4% premium to Avangrid’s share price the day before the offer was made.Iberdrola, one of Europe’s largest power companies, said in an earlier statement on Friday that the transaction will enhance its exposure to its U.S. business, which it intends to expand.
Avangrid operates renewable power assets in 24 states and serves 3.3 million people in New York and New England through regulated utility operations, according to its website.In March, Iberdrola announced plans to invest 41 billion euros ($44.57 billion) over the next three years to upgrade and extend electrical systems in the US.
($1 = 0.9199euros)
Source: Iberdrola
