2024-03-07 09:07:49
Iberdrola steps on the accelerator in the United States after its failed attempt for PNM Resources. The largest electricity company in Europe and second in the world by market value has presented this Thursday an offer of 2,280 million euros to take over 18.4% of its subsidiary Avangrid that it does not yet control, as communicated to the National Market Commission of Securities (CNMV). The operation, which involves the payment of a 10% premium on the average price of the last month, is pending the usual due diligence processes and the opinion of the boards of directors. Until then we cannot talk about a takeover bid.
The purchase is also subject “in accordance with the requirements of the shareholders’ agreement between Iberdrola and Avangrid, to its approval by Avangrid shareholders who own at least the majority of the issued and outstanding shares of Avangrid that are not in possession of Iberdrola.” The Spanish company has 81.6% of Avangrid; The rest is in the hands of the Qatari sovereign fund, with 3.77%, and the American fund managers, Vanguard, Atlas and Blackrock, with between 1% and 2%.
The proposal is part, according to the company, of its “strategy to expand its presence and investment in markets with a robust credit rating and high potential for investments in the network business.” Iberdrola has not indicated, given the preliminary nature of the proposal, whether it intends to delist its US subsidiary, which has accumulated a 17% drop in the stock market in the last year. The Spanish company’s shares, for their part, registered a rise of just over one percentage point in the first stages of trading this Thursday.
The operation comes just on the eve of Iberdrola celebrating its investor day, in which in just two weeks it will present its investment plans for the coming years, and two months after Iberdrola’s big bet in the United States will fail: the purchase of the also American PNM Resources, in which it planned to invest 11,000 million. Avangrid withdrew the offer on the first day of 2024 after a legal battle of almost three years and the state’s competition authorities vetoing the transaction in 2021.
Then, the US subsidiary of Iberdrola already announced that it would focus on other growth opportunities: “We will focus on the delivery of more than 5,000 million dollars (4,500 million euros) in capital projects within the framework of our multi-year tariff plans of New York and Maine, in addition to a $2 billion increase in capital projects related to clean energy transmission in New York,” it said.
The main destination of the 11,000 million that Iberdrola iba to allocate to PNM, as EL PAÍS announced, would be the electrical networks in mature markets. Avangrid, with many interests in this area, and the United States, the world’s leading economy, meet both requirements. The North American giant is Iberdrola’s second largest market in networks, after Brazil, and the fourth in electricity generation and marketing, behind Spain, the United Kingdom and Mexico. In this last heading, the United States will almost certainly surpass its southern neighbor after the recent sale of its gas plants to a consortium led by the Mexican State in exchange for almost 6,000 million euros.
If successful, the offer for its subsidiary would further consolidate its position in the United States, a market that is increasingly attractive for Spanish and – in general – European energy companies due to the package of incentives for renewables contained in the Inflation Reduction Act (IRA). At the cost, of course, of a net debt that – unlike what happened in the rest of the large Spanish energy companies, which have seen their liabilities fall or stabilize – has not stopped growing in the last decade: in that period , with strong investment effort and clearly rising profits, debt has gone from less than 26,500 to almost 48,000 million euros.
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