Iberdrola sweeps remaining Avangrid shares in $2.6bn deal

US energy company Avangrid is set to be fully acquired by Spain’s utility giant Iberdrola in a deal valuing $2.55 billion.

Iberdrola already owns 81.6% of the company.

Iberdrola will acquire the remaining 18.4% of issued and outstanding shares of common stock of Avangrid that it does not currently own for $35.75 dollars per share.

The transaction is expected to close in the fourth quarter of 2024.

The agreement had the unanimous favourable vote of the members of the Boards of Directors of both Avangrid and Iberdrola.

Following the closing of the transaction, a request will be made to delist Avangrid shares from the New York Stock Exchange.

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According to Iberdrola, the strategic move will increase its market penetration in the US, increasing exposure to the country’s regulated networks business and allowing them to grow in markets with strong credit ratings.

Avangrid has two primary lines of business – networks and renewables – and is headquartered in Connecticut, US, with approximately $45 billion in assets and operations across 24 US states.

Through its networks business, Avangrid owns and operates eight electric and natural gas utilities, serving more than 3.3 million customers in New York and New England. Through its renewables business, Avangrid owns and operates a portfolio of renewable energy generation facilities across the United States.

Iberdrola is Europe’s largest electricity utility by market capitalisation, supplying energy to almost 100 million people globally. With a focus on renewable energy, smart networks and smart solutions for customers, Iberdrola’s main markets include Europe (Spain, the United Kingdom, Portugal, France, Germany, Italy and Greece), the United States, Brazil, Mexico and Australia.

The company has a workforce of over 42,200 and assets of €150 billion ($163 billion). In 2023, the company posted revenues of nearly €50 billion ($54.4 billion) and net profit of €4.8 billion ($5.2 billion).

The transaction is conditional on shareholder approval and approval from various regulators, such as the Federal Energy Regulatory Commission and the state regulatory commissions of New York and Maine.

In a release, Pedro Azagra, president and chief executive officer of Avangrid, commented: “We are excited about Iberdrola’s continued investment in Avangrid and commitment to the United States.

“As a wholly-owned member of the Iberdrola Group, we will continue to serve our customers and build our renewable energy assets work to achieve our vision to lead the clean energy transition with a strong commitment to sustainability, community, governance and our employees.”