Iberdrola acquires British network operator Electricity North West
Ignacio Galán, Iberdrola’s executive chairman in his office. Image courtesy Iberdrola
Global energy giant Iberdrola has signed an agreement to acquire 88% of Electricity North West (ENW) in the UK in a deal valuing the company at €5 billion ($5.5 billion).
Iberdrola is acquiring ENW for an equity value of £2.1 billion (€2.5 billion).
The company in a release said the move is in line with their strategy to invest in electricity networks and in countries with a strong credit rating, such as the United Kingdom, which has an AA credit rating.
Iberdrola merged with British company ScottishPower in 2007 and since then, the UK has been one of the leading investment destinations for the company, where it has invested around £30 billion (€36 billion).
With the completion of the deal with EWN, the UK becomes Iberdrola’s leading market by regulated asset base, which is valued at approximately €14 billion ($15.3 billion), followed by the United States at €13.3 billion ($14.6 billion).
Commenting in a release was Ignacio Galán, Iberdrola’s executive chairman: “This transaction reinforces our commitment to investing significantly in electricity networks, which are a critical component for supporting the electrification and decarbonization of the economy.
“The agreement is also consistent with our strategy to invest in countries that have ambitious investment plans and stable and predictable regulations. As a result of this acquisition, our regulated networks asset base in the UK is now valued at €14 billion. When combined with the US, these two markets now represent two-thirds of our total global regulated asset base.”
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Geographically, ENW is located between the two existing ScottishPower network license areas, in central and southern Scotland and Merseyside and North Wales.
ENW distributes electricity to almost five million people in the North West of England, in locations such as Manchester, Lancaster and Barrow, and has approximately 60,000km of electricity distribution networks.
Iberdrola will now distribute electricity to around 12 million people in the UK, across a network spanning more than 170,00km. In addition, Iberdrola will employ more than 8,500 people in the country.
Iberdrola and a consortium of investors from Japan, led by Kansai, which will retain 12% of ENW capital, have signed a shareholders’ agreement to collaborate on a long-term basis.
The acquisition is subject to the standard authorizations for this type of transaction.
Currently, Iberdrola operates more than 111,400km of installed power lines in the UK, with 40 onshore wind farms and two offshore wind farms in operation.
The total capacity of renewables in operation in the UK exceeds 3,000MW, which is enough to power the equivalent of more than two million homes, free of emissions.
As part of its growth plans, the company is building the East Anglia Three offshore wind farm, the second largest in the world, with a total capacity of 1,400MW.
