Iberdrola expands US renewables business with $8.3 billion deal for PNM Resources

Spanish renewable energy giant Iberdrola has announced a deal worth US$8.3 billion, including debt, to buy utility PNM Resources, in a move that will significantly grow its US subsidiary Avangrid.

Absorbing PNM into Avangrid will create the third largest renewable energy operator in the US, 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. The deal is dependent on final approval by PNM’s shareholders, as well as other regulatory conditions, although Iberdrola expects the deal to close in 2021.

Iberdrola said the merged company would have assets worth $40 billion, generate core earnings of around $2.5 billion and net profit of $850 million.

The deal for PNM is the latest in a spate of acquisitions as part of a $11.85 billion investment drive which has seen Iberdrola buy assets in France, Australia and Japan this year alone.

CEO Ignacio Galan said his strategy consisted of: “Friendly transactions, focused on regulated businesses and renewable energy, in countries with good credit ratings and legal and regulatory stability, offering opportunities for future growth.”