Global energy and electricity provider Iberdrola announced today that its majority owned US utility company Avangrid has entered an agreement to acquire PNM Resources. Under the terms of the deal, which has been approved by the boards of both companies, PNM shareholders will receive $50.30 cash per share of common stock, implying an enterprise value for PNM of $8.3 billion.
According to Iberdrola, the deal will create one of the largest companies in the US utility industry with 10 regulated electricity companies in 6 states (New York, Connecticut, Maine, Massachusetts, New Mexico and Texas) and the third largest renewable energy operator in the United States.
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.”
Iberdrola has been active on the M&A and business development front this year, with several transactions aimed at expanding its renewable energy portfolio. Today’s announcement marks the company’s 8th corporate transaction since the beginning of the Covid pandemic following acquisitions in France (St Brieuc and Aalto Power), in Australia (Infigen), offshore wind companies in Sweden and Japan and onshore wind projects in Scotland and Brazil. Prior to the PNM deal, the company has made capital investments of €10 billion this year into renewables, more than double the level of recent years.
AVANGRID is the already third largest wind operator in the U.S. and is a leading sustainable energy company with more than 7.4 gigawatts of installed wind and solar capacity. According to the companies, the acquisition of PNM will provide a platform for AVANGRID to further expand its renewables business in the Southwest, with the combination resulting in a greater ability to invest in energy efficiency and new technologies.
Dennis Arriola, Avangrid’s CEO who will remain as CEO of the combined Company said:
“This merger between Avangrid and PNM Resources is a strategic fit and helps us further our growth in both clean energy distribution and transmission, as well as helping to expand our growing leadership position in renewables. Our two companies also share the same values as we both are passionate about our customers, employees, and the communities we serve. In addition, both AVANGRID and PNM Resources are leaders in environmental, social and governance issues that impact our stakeholders.”
Pat Vincent-Collawn, Chairman, President and CEO of PNM Resources, said:
“We are excited to be part of this transaction that provides so many benefits to our customers, communities, employees and shareholders. Our combined companies provide greater opportunities to invest in the infrastructure and new technologies that will help us navigate our transition to clean energy while maintaining our commitments to our local teams and communities.”