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Iberdrola launches the tender offer for full control of its Avangrid subsidiary

Iberdrola launches the tender offer for full control of its Avangrid subsidiary

The public takeover offer worth 2,280 million euros is a way to reinvest part of the hardship acquired after the sale of the Mexican company in the priority market of the United States.

Iberdrola is preparing to reinvest part of the 5.7 billion euros it received from the sale of its Mexico business in the United States. On Thursday, the electricity company submitted a public takeover offer (OPA) to buy 18.4% of the capital of its North American subsidiary, Avangrid, according to El Economista newspaper.

The investment represents a $2,486 million investment for Iberdrola – around €2,280 million at the current exchange rate – and means a strengthening of its commitment to the country after having to abandon the purchase of PNM resources.

As reported by the company to the National Securities Market Commission (CNMV, Spanish CMVM), the company is offering $34.25 per share, which represents a premium of about 10% compared to the weighted average price of the last 30 days. Currently, Iberdrola already owns about 81.6% of the North American company.

The newspaper says that the aim of this deal is to increase exposure to the networking business in the United States at a crucial moment for Iberdrola, which wants to grow in markets with high credit ratings and in regulated businesses, such as networking.

Headquartered in Connecticut, Avangrid currently has $44 billion in assets and operations in 24 U.S. states (50 states in total). Its main businesses are two types: grids and renewable energy. Through its grid businesses, Avangrid owns and operates eight electric and natural gas companies, serving more than 3.3 million customers in New York and New England.

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In the field of renewable energy, the subsidiary owns and operates a group of renewable energy generation facilities in the United States. The company employs about eight thousand employees. In 2023, it reported adjusted gross operating profit (EBITDA) of $2.43 billion, compared to $2.246 billion the previous year.

The electricity company will present its strategic plan on March 21, and investors expect investment in networks to play an important role.