Iberdrola buys another power company in the US for 3,667 million and continues to grow amid the pandemic
Iberdrola will be one of the strongest companies in the coronavirus crisis. After buying the Australian Infigen last August, the Spanish power company pulls back as a checkbook and announces on Wednesday the acquisition of the American group PNM Resources to strengthen its presence in the USA.
The operation values the company at 3,667 million euros and has been carried out in a “friendly” manner after having the green light of the board of directors of PNM Resources. The integration makes the Spanish group the third largest renewables operator in the North American market, with a total presence in 24 states, 4.1 million supply points and 168,000 kilometers of networks. PNM is, for example, the main power by supply in cities such as Las Vegas, Albuquerque or Santa Fe, in the State of New Mexico.
Iberdrola President Ignacio Galán stressed that the operation responds to the group’s strategy of investing “in countries with good credit rating and legal and regulatory stability where future growth opportunities are offered”. Just a few days ago, however, the group raised with trade unions in Spain their intention to reduce their workforce in spain by 15%, with the departure of 1,450 employees, to reduce their current level of overcapacity.
The purchase of PNM will be articulated through the North American subsidiary Avangrid by paying $50.3 per share. The figure represents the payment of a premium of 10% over the price at which the electricity titles closed yesterday on Wall Street and 19% over the average price of the last month, which values the group by including debt totaling $8.3 billion. The closure of the purchase, scheduled for the last quarter of 2021, is conditional on its approval by the PNM shareholders’ board and us regulatory authorities.
The company has also announced that it rebukes former ‘popular’ minister Angel Acebes as a member of its board of directors after being acquitted in the ‘Bankia case’. Acebes left the group in 2019 after seven years in office to avoid the impact that his potential conviction for the bank’s IBRO exit would have on the electricity. It now becomes stronger by joining Galán himself on a proposal from the delegated executive committee of the council, the strong energy management and control body.
Finally, the group presented its results at the end of the third quarter of the year with a net profit increase of 4.7%, to 2,681 million euros, and a new investment record above 6 billion euros. Spain remains the group’s largest market in the traditional electricity generation and grid businesses (nuclear and thermal), but it ranks third in the thriving renewables field behind the UK and US.