Iberdrola Acquires New Mexico and Texas Utility PNM Resources

Iberdrola, through its US subsidiary AVANGRID, has announced the acquisition of PNM, the largest utility in New Mexico with operations in Mexico.

Iberdrola, through its US controlled subsidiary AVANGRID, has announced the acquisition of PNM. This friendly transaction, recommended by PNM’s board of directors, will be effected via merger. PNM’s shareholders will receive $4.3 Bn in cash. It implies an Enterprise Value of approximately USD 8.3 Bn considering a net debt plus other adjustments of approximately USD 4 Bn.

The combination of Avangrid and PNM, with over 4.1 million points of supply, regulated asset base (RAB) of $14.4 Bn, more than 168,000 Km of networks and approximately 10.9 GW of installed capacity (as of 2019), will accelerate Iberdrola Group’s growth in the US.

The agreement between Avangrid and PNM, is subject to approval by PNM shareholders. As PNM and its subsidiaries operate in a regulated sector, the relevant authorisations at state level (New Mexico Public Regulation Commission and Public Utility Commission of Texas) and Federal level (Federal Energy Regulatory Commission, Hart Scott Rodino Clearance, Committee on Foreign Investment in the United States, Federal Communications Commission and Nuclear Regulatory Commission) will be required. This process is expected to be completed in 2021.

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Ignacio Galán, Chairman & CEO of Iberdrola and Chairman of Avangrid said, “The operation aligns to the strategy we have followed for more than 20 years. 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”.

The Spanish conglomerate currently owns 1,900 MW of renewable energy and a pipeline of 1,400 MW renewables assets in New Mexico and Texas. In addition, Iberdrola operates a retail business in Texas.

Avangrid, listed on the New York Stock Exchange, is a diversified energy and utility company with operations in 24 states in the United States that consolidates the US energy operations of its parent, Iberdrola. In 2019, Avangrid had approximately 2.3 million electricity and 1.0 million gas points of supply. The company distributed a total of 36 gigawatt-hours (GWh) of electricity and had an installed capacity of 8.1 gigawatts (GW).