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Iberdrola to Acquire Remaining Avangrid Stake in an All-Cash Deal Worth $2.6 Billion

  • May 18, 2024

Iberdrola - Avangrid Merger

Spanish utility Iberdrola, S.A. on May 17, entered into a merger agreement to acquire the remaining 18.4% stake in Avangrid, Inc. (AGR) that it does not already own, in an all-cash deal worth about $2.551 billion.

The deal comes after Avangrid failed to acquire PNM Resources (PNM) in January in a $8.05 billion deal, as it couldn’t receive the required approval from New Mexico’s utility regulator three years after the announcement of the deal.

Iberdrola here will pay $35.75 per share for the outstanding Avangrid stock, representing a discount of 4.74% from the stock’s last close. Iberdrola in March had offered to buy Avangrid for $34.25 per share, which was at a premium of 6.76% back then.

The share price for Avangrid dropped to $35.84 on Friday after the deal was announced. Avangrid’s EV/EBITDA (TTM) ratio is 12.51, close to the sector median of 12.42.

Iberdrola, one of Europe’s largest power companies, said that the deal would increase its exposure to its U.S. business, which it is seeking to grow.

Avangrid operates renewable power assets in 24 states and also serves 3.3 million customers in New York and New England through regulated utility operations. It is a member of the group of companies controlled by Iberdrola. It began trading as an independent company in December 2015, following the merger of Iberdrola USA and UIL Holdings Corporation.

Avangrid expects to continue paying regular quarterly cash dividends not to exceed $0.440 per share through the closing of the transaction, which is expected in the fourth quarter of 2024. Following the closing, Avangrid shares will be delisted from the New York Stock Exchange.

For more information, please refer to the detailed metrics of the deal here:

Deal Metrics for the acquisition of Avangrid, Inc. (AGR) by Iberdrola, S.A.

Editor’s Note: Baranjot Kaur contributed to this article

Disclaimer: The content of this article is intended for informational purposes only. Please conduct your own research before investing in any securities mentioned. We cannot guarantee the accuracy or completeness of the data provided in this article.