Spanish energy giant Iberdrola has signed an agreement to acquire the 18.4% minority stake in its US subsidiary Avangrid that it did not already own. The transaction, approved by the Boards of Directors of both companies, represents an investment of $2.55 billion. This strategic acquisition will enable Iberdrola to strengthen its presence in the U.S. market, a key market with solid credit ratings and regulated activities.
Financial details and approval process
The purchase price will be $35.75 per share, up from the initial offer of $34.25. The transaction values the acquired stake at around 2.348 billion euros, based on an exchange rate of 1.0866 EUR/USD. Once the transaction has been finalized, Iberdrola will apply to delist Avangrid from the New York Stock Exchange. In addition, the closing of this transaction requires the approval of shareholders and regulatory authorities, including the Federal Energy Regulatory Commission and the regulatory commissions of the states of New York and Maine.
Iberdrola’s expansions and objectives
Headquartered in Connecticut, Avangrid manages $44 billion in assets and operates in 24 US states. The company focuses primarily on two sectors: networks and renewable energies. Through its networks business, Avangrid owns and operates eight electricity and natural gas distribution companies, serving more than 3.3 million customers in New York State and New England. In the field of renewable energies, Avangrid owns and operates a vast portfolio of renewable energy plants across the United States.
Future prospects and development
In 2023, Avangrid achieved adjusted gross operating profit (EBITDA) of $2.43 billion. This acquisition enables Iberdrola to increase its exposure to American networks at a key moment in its expansion. In addition, the US market, with its solid infrastructure and growth prospects, represents a strategic opportunity for Iberdrola, which aims to increase its presence in regulated and stable sectors. The full integration of Avangrid will also facilitate the management and optimization of the company’s operations in the United States.
Iberdrola’s acquisition of the remaining stake in Avangrid is a crucial step in strengthening its operations in a fast-growing market. This consolidation reflects Iberdrola’s commitment to investing in critical infrastructure and supporting the transition to more sustainable energy sources. By fully integrating Avangrid, Iberdrola is better positioned to innovate and meet the growing needs for renewable energy and grid management in the United States.
