The Iberdrola headquarters in Madrid, in a file photo. Andres Kudacki (AP)
An important change in Iberdrola's plans in the United States. The Spanish giant, which has for months become the largest European electricity company in terms of market value, announced early on Tuesday morning that it was ceasing to purchase the American company PNM Resources through its subsidiary Avangrid. The North American country is one of the largest markets for the energy company chaired by Ignacio Sánchez Galán and fundamental to its growth strategy.
“Avangrid, a company 81.5% owned by Iberdrola, announces this day its decision to terminate the merger agreement signed with PNM Resources on October 20, 2020, due to failure to meet the conditions established within the deadline provided for this have been met (…) for the completion of the operation,” said a statement sent by Iberdrola to the Spanish National Commission for the Securities Market (CNMV) on the second day of the year, marking the first real activity on the markets.
In response to questions from this newspaper, a company spokesman called for the next investor day, scheduled for March 21, where “further details” on Iberdrola’s future plans in the US, “a strategic country for us”, will be announced. The response on the stock market was not bad at all: the electricity company's shares began Tuesday's session with an increase of almost 1.2%.
The biggest setback for the transaction came a little over a few years ago, in December 2021, when New Mexico regulators rejected the purchase, indirectly alluding to the Villarejo case: “It is not the right partner at this critical moment in our lives . “Energy transition.” The five members of the organization then expressed their opinion, which was unanimously against it.
Although the operation – a merger by absorption worth then $8.3 billion (7.52 billion euros at the current exchange rate including debt) – suffered significant delays after this setback, the directors of the Spanish company – led by Sánchez Galán himself – In recent shareholder meetings and meetings with investors, they had reaffirmed their confidence that it would happen. Until this Tuesday the PNM purchase finally failed.
At the penultimate general meeting of shareholders, held in Bilbao in June 2022, the CEO of Iberdrola was “confident” that the Villarejo case – which had led to the indictment of several executives of the energy company – would not derail the operation. “We have all but one federal and state permits. I am sure that the result of the appeal [presentado para tratar de revertir la decisión inicial] It will be positive,” he noted at the time.
Five months later, in the update of its strategic plan, Iberdrola included the purchase of PNM, which at that time was valued at 11,000 million euros and which was targeted for completion during 2023: “We feel quite comfortable and I am convinced that “The “The agreement will be finalized,” Sánchez Galán said before dozens of analysts gathered in London.
When Iberdrola announced the operation in the fall of 2020 – while the world is still struggling to put the worst of the pandemic behind it and companies are more worried about the immediate than the future – Iberdrola emphasized that the combination of Avangrid and PNM – which also includes At that point it had 4.1 million supply points, a regulated asset base of $14.4 billion, more than 168,000 kilometers of distribution and transportation networks and about 10.9 gigawatts of installed capacity – that would The Spanish electric company's growth in the US, its fourth market after that, is accelerating in Spain, the UK and Brazil.
The integration of PNM, he said at the time, would create one of the industry's largest companies in the North American colossus, with 10 regulated electric companies in New York, Connecticut, Maine, Massachusetts, New Mexico and Texas, as well as the third renewable energy operator in the United States a total presence in 24 states.
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