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Iberdrola acquiring PNM, merging it with Avangrid in $8.3B enterprise transaction

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Spain-based energy company Iberdrola is acquiring the primary electric utility in New Mexico in a deal valued at around $8.3 billion.

Iberdrola, through its Avangrid subsidiary, is buying PNM Resources, which itself owns Public Service Co. of New Mexico as well as its utility services in Texas. Once combined with East Coast-based Avangrid, the integrated operation would contain 10 regulated electricity providers in New York, Connecticut, Maine, Massachusetts, New Mexico and Texas.

PNM Resources (PRNewsFoto/PNM Resources, Inc.) (PRNewsfoto/PNM Resources, Inc.)

“The operation aligns to the strategy we have followed for more than 20 years,” said Iberdrola CEO and chairman Ignacio Galán. “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.”

The Spanish firm already has about 1,900 MW of renewable energy projects in Texas and New Mexico. The combined company will have assets totaling more than $40 billion, with some 4.1 million supply points and 10.9 GW of installed capacity.

Iberdrola has made about eight corporate transactions this year.

The merger of Avangrid and PNM will need the latter’s shareholder approval, as well as authorizations from state and federal regulators. The PNM board of directors has recommended the approval.

The deal is expected to close in 2021.

Th merged entity would join NextEra, Duke, Dominion, Southern, AEP and Exelon among the largest electric utilities in the U.S. Recently, news reports revealed that NextEra had made a quiet offer to acquire Duke Energy, but the latter was not interested.