Spanish energy utility Iberdrola has taken full ownership of its US subsidiary Avangrid for a total of US$2.551 billion.
Iberdrola acquired the 18.4% minority stake that it did not already hold in Avangrid for US$35.75 per share, according to its filing with the Spanish National Securities Market Commission (CNMV). Following the closure of the transaction, Iberdrola will request that shares in Avangrid be delisted from the New York Stock Exchange.
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In January, Avangrid cancelled a planned merger with the Public Services Company of New Mexico (PNM) following two years of delays in the approvals process.
The acquisition will shift focus towards Avangrid/Iberdrola’s US transmission networks business; Avangrid currently owns and operates eight electric and natural gas companies. 40% of Iberdrola’s Q1 2024 investment was into its transmission business, according to its financial reporting, in a quarter which saw “record” investment for the company.
In a statement, Iberdrola said it ”wants to grow in markets with strong credit ratings and in regulated businesses such as networks.”
US utilities have been shifting their operations and investments towards transmission infrastructure and regulated markets recently. Duke Energy and American Electric Power (AEP) both divested themselves of utility-scale solar assets in unregulated markets in 2023 in favour of investments in their own regulated markets and transmission (Premium access).
Transmission represents a long-term stable investment for utilities, whilst regulated markets (those where a utility controls the generation, transmission and distribution of power) offer a low-risk market.
