November 27, 2020

acquires PNM Resources for 3,663 million

Iberdrola repeats Ángel Acebes as director and adds another acquisition in the middle of the pandemic. The Spanish multinational has announced this Wednesday that it has reached an agreement to acquire the power company PNM Resources for an amount of 4,317.5 million dollars (about 3,663.5 million euros), which will allow it to accelerate its growth in the United States , one of its strategic markets.

Parallel to this announcement, the power company has communicated to the National Securities Market Commission (CNMV) that it is recovering former PP minister Ángel Acebes as an independent director after his acquittal in the Bankia case. The company has reappointed Acebes as a member, who in 2019 left the highest management body of the electricity company, after at the end of last month he was acquitted by the National Court along with the rest of the defendants in the trial for the IPO of Bankia.

The former minister of José María Aznar, who will also be a member of Iberdrola’s executive committee, will replace Georgina Yamilet Kessel, who has resigned. With this appointment, Iberdrola once again has ex-politicians, a trend that seems to have gained new vigor with the pandemic, after recruiting in September as directors of two subsidiaries in Latin America the former ministers of the PP Fátima Báñez and Isabel García Tejerina.

The purchase of PNM Avangrid was announced on the eve of Iberdrola’s quarterly results. These reflect a 4.7% profit growth in the first nine months of the year, to 2,681 million, and an increase in investments of 23%, to 6,638 million. The acquisition of this American company will be carried out through Avangrid, controlled 81.5% by the Spanish power company. This subsidiary has announced a merger agreement to acquire 100% of PNM Resources, which is listed on the New York Stock Exchange, in exchange for a cash consideration of $ 50.3 per share (about 42.2 euros).

PNM, domiciled in the State of New Mexico, carries out regulated businesses mainly in the transmission, distribution and electricity generation in the States of New Mexico and Texas. Its board of directors has unanimously approved the operation, which it has recommended to its shareholders. Iberdrola has undertaken to provide Avangrid with the funds necessary to satisfy the consideration offered.

The acquisition implies a company value of approximately 8.3 billion dollars. It will give rise to one of the largest companies in the sector in North America with 10 regulated electricity companies in 6 states (New York, Connecticut, Maine, Massachusetts, New Mexico and Texas) and the third renewable operator in the United States with a total presence in 24 states .

The combined company will have assets of more than 40,000 million dollars, will have approximately a gross operating profit (EBITDA) of 2,500 million dollars and a net profit of 850 million dollars. The combination of Avangrid and PNM will manage more than 4.1 million supply points, a regulated asset base (RAB) of 14.4 billion dollars, more than 168,000 km of networks and approximately 10.9 GW of installed capacity.

The operation is subject to its approval by PNM’s general meeting of shareholders; as well as the obtaining of the mandatory regulatory authorizations by the pertinent federal and state authorities of the United States, and other usual conditions in this type of operations. The transaction is expected to be consumed in approximately 12 months.

The Iberdrola group has reaffirmed its investment objective of 10 billion in 2020, despite the impact of COVID-19. In the first nine months of the year, their investments have grown by 52% and represent 54% of the 6,638 million invested in the period. With the investments in renewables made in the last year, it adds 4,600 new megawatts (MW) of power in the last twelve months -almost 1,300 MW in the third quarter- and advances in the construction of 7,600 MW.

Iberdrola has announced the purchase of PNM after last summer the Spanish power company launched a friendly bid for the Australian Infigen valued at some 553 million euros; In September, it landed in Japan after reaching an agreement with Macquarie to acquire 100% of the Japanese offshore wind developer Acacia Renewables for an amount that was not made public.

In July, Iberdrola also closed the purchase of 100% of the French company Aalto Power, owner of onshore wind farms in France, for 100 million euros; and in March it acquired 100% of the French company Ailes Mariles, which is developing an offshore wind project in front of French Brittany, in an operation valued at around 50 million.

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