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Avangrid to acquire PNM Resources
Posted on Wednesday, 21 October 2020 13:16
Spanish renewable energy grop Iberdrola, via US subsidiary Avangrid, has agreed to acquire energy company PNM Resources for USD 4.30 billion.
The buyer is offering USD 50.30 per item of stock held in cash, representing a premium of 9.0 per cent to the target’s close of USD 46.13 on 19th October 2020, the last trading day prior to the announcement.
Avangrid’s bid is 19.3 per cent higher than PNM Resources’ 30-day volume weighted average share price as of yesterday and is expecting the acquisition to boost earnings per share in the first full year following completion.
Iberdrola has provided the New York-listed acquiror will a funding commitment letter for the entire transaction value.
The deal remains subject to shareholder and regulatory approval, the process of which could take up to 12 months.
Both boards have given the green light to the takeover, which will create a leading US regulated utility and renewable energy platform.
Together, the business will be larger and more diversified with electric and gas facilities in complementary locations, serving around 4.00 million customers in New York, Connecticut, Maine, Massachusetts, New Mexico and Texas.
Avangrid is billed as the third-largest wind operator in the US, with more than 7.40 gigawatts of installed wind and solar capacity.
PNM Resources is an energy holding company that also comprises PNM and TNMP utilities, with around 2,811 megawatts of generation capacity and providing electricity to around 790,000 homes and businesses.
The news comes on the same day Pioneer Natural Resources Company agreed to acquire independent oil and natural gas group Parsley Energy in an all-stock transaction worth USD 7.60 billion, including debt.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 1,606 deals targeting the utilities industry announced worldwide in 2020 to date.
In the largest of these, Berkshire Hathaway Energy Company agreed to buy the gas transmission and storage assets of Dominion Energy for USD 9.70 billion.
Other targets included PG&E, Suez, Direct Energy and Huadian Fuxin Energy.
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