Iberdrola buys the US company PNM Resources for 3,663 million euros

The board of directors of Iberdrola's US subsidiary, Avangrid, has approved the acquisition of the company PNM Resources, with activities in New Mexico and Texas, for US $ 4,318 million in cash, about € 3,663 million.

As Iberdrola informs the National Securities Market Commission (CNMV), this is a friendly transaction recommended by PNM's board of directors, which will be carried out through a merger.

The implied enterprise value would be approximately $ 8.3 billion (€ 7 billion) considering net debt plus adjustments of approximately $ 4 billion (€ 3.3 billion).

The purchase price represents a premium of 10% over PNM's share price as of Tuesday, October 20, and 19.3% over PNM's average share price during the 30 days prior to this Wednesday.

The combination of Avangrid and PNM, with approximately 4.1 million supply points, a regulated asset base (RAB) of approximately 14.4 billion dollars (12 billion euros), more than 168,000 kilometers of distribution and transmission networks and approximately 10.9 gigawatts (GW) of installed capacity (as of 2019), will accelerate the growth of the Iberdrola group in the United States.

The integration into Avangrid will give rise to one of the largest companies in the US sector with 10 regulated electricity companies in six States (New York, Connecticut, Maine, Massachusetts, New Mexico and Texas) and the third renewable operator in the United States with a total presence in 24 states.

The combined company will have assets of more than 40,000 million dollars (34,000 million euros), will have approximately a gross operating profit (Ebitda) of 2,500 million dollars (2,100 million euros) and a net profit of 850 million dollars (717 million euros).

The president of Iberdrola, Ignacio Sánchez Galán, highlights through a statement: “The operation is the consequence of the strategy we have followed for more than 20 years: friendly operation, focused on regulated businesses and renewable energies, in countries with good qualifications. credit and legal and regulatory stability and that offer opportunities for future growth ”.

New Mexico and Texas are known states for Iberdrola.

It currently has 1,900 renewable megawatts (MW) and 1,400 MW in its portfolio, in addition to having started commercial activity in Texas.

The agreement between Avangrid and PNM is subject to the approval of PNM shareholders.

Since this firm and its subsidiaries operate in a regulated sector, authorizations will be required at the state level (New Mexico Public Regulation Commission and Public Utility Commission of Texas) and at the federal level (Federal Energy Regulatory Commission, Hart Scott Rodino Clearance, Committee on Foreign Investment in the United States, Federal Communications Commission and Nuclear Regulatory Commission).

This process is expected to be closed in 2021.