Iberdrola's US Unit Avangrid To Buy PNM Resources For $4.3 Bln In Cash

(RTTNews) - Spanish utility Iberdrola S.A.(IBDSF.PK) announced Wednesday that its U.S. energy operations unit Avangrid Inc. (AGR) agreed to buy US-based PNM Resources (PNM) in a deal with enterprise value of approximately $8.3 billion.

In the deal, PNM's shareholders will receive $50.30 cash per share or $4.3 billion cash in total at closing of the transaction. The enterprise value comprises a net debt plus other adjustments of approximately $4 billion.

Iberdrola said the transaction will contribute positively to results from the first year. The transaction, subject to the relevant regulatory and PNM shareholders' approval, is expected to close in 2021.

The purchase price represents a premium of 10 percent over the PNM's share price as of October 20 and 19.3 percent over the average PNM share price during the 30 days prior to prior to October 21.

The board of directors of Avangrid has approved the acquisition of PNM. This friendly transaction, recommended by PNM's board of directors, will be effected through merger.

The integration of PNM Resources, the utility of New Mexico and Texas, into Avangrid will create a major US utility with 10 regulated electricity companies in 6 states and the third largest renewable energy operator in the United States with a total presence in 24 states.

The combined company will have assets in excess of $40 billion, have approximately $2.5 billion in EBITDA and a net profit of $850 million.

Ignacio GalánChairman & CEO of Iberdrola and Chairman of Avangrid, said, "Friendly transactions, focused on regulated businesses and renewable energy, in countries with good credit ratings and legal and regulatory stability, offering opportunities for future growth."