SPANISH FIRM BUYS PNM RESOURCES FOR $8.3B, INCLUDING DEBT
Spanish renewable energy firm Iberdrola has announced plans to expand in the United States with a deal to buy utility PNM Resources through its US unit Avangrid worth $8.3 billion including debt, Isla Binnie reported for Reuters.
Absorbing PNM into Avangrid will create the third-largest renewable energy operator in the United States, with business spanning 24 states, Iberdrola said in a statement.
PNM’s board unanimously approved the $4.3 billion offer to its shareholders of $50.3 per share, the filing said. Iberdrola expects the deal to close in 2021 and start boosting financial results from the first year.
Green energy targets and increasing investor interest in protecting the environment have buoyed Iberdrola and other renewables-focused utilities. The pandemic has also seen US utilities look harder at consolidation to cut costs and spur investment. Active in New Mexico and Texas, PNM gives Avangrid a route to expand its regulated business beyond the US northeast. PNM could also benefit from Avangrid’s renewables experience as it works to cut emissions. Iberdrola said the merged company would have assets worth $40 billion, generate core earnings of around $2.5 billion and earn net profit of $850 million. This is Iberdrola’s eighth deal this year as part of a 10 billion euro ($11.85 billion) investment drive in which it has already bought assets in France, Australia and Japan.