The board of Iberdrola subsidiary Avangrid Inc. has approved the acquisition of New Mexico-based PNM Resources in an all-cash transaction valued at $8.3 billion.
The merger would create “one of the largest companies in the U.S. utility industry with 10 regulated electricity companies in six states (New York, Connecticut, Maine, Massachusetts, New Mexico and Texas) and the third largest renewable energy operator in the United States with a total presence in 24 states,” said Bilbao, Spain-based Iberdrola.
PNM, headquartered in Albuquerque, provides electricity to about 790,000 homes and businesses in New Mexico and Texas. The firm’s 2,811 MW power generation fleet includes 989 MW of natural gas-fired capacity.
Avangrid, meanwhile, through its Avangrid Networks business line, owns eight electric and natural gas utilities that serve 3.3 million customers in New York and New England. Iberdrola also owns four combined-cycle natural gas plants in the United States totaling 212 MW.
The combined company would have assets in excess of $40 billion including a regulated asset base of $14.34 billion, and manage more than 4.1 million supply points, more than 180,000 kilometers of networks and about 10.9 GW of installed power generation capacity.
“This is a friendly transaction, focused on regulated businesses and renewables in highly rated states with legal and regulatory stability and predictability offering future growth opportunities,” said Iberdrola CEO Ignacio Galán.
Avangrid CEO Dennis V. Arriola said the merger “helps us further our growth in both clean energy distribution and transmission, as well as helping to expand our growing leadership position in renewables.”
Avangrid has offered to pay $50.30 for each PNM share, which it said represented a premium of 10% over PNM’s closing price on Tuesday (Oct. 20) and 19.3% over the 30-day average.
Regulatory approvals are expected to be completed in about a year. The transaction is expected to close by the end of 2021.
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