Iberdrola’s U.S. unit Avangrid Inc said it has terminated its planned $8.3 billion acquisition of rival PNM Resources because it could not get all the necessary regulatory approvals to close the deal by Dec. 31, 2023.
The deal, worth $4.3 billion excluding debt, was unanimously approved by PNM’s board in 2020 and was expected to create a renewable energy operator with a combined market value topping $20 billion.
The two utility companies had obtained all necessary approvals by the end of December except that of the New Mexico Public Regulation Commission, Avangrid said in a statement.
The regulator had rejected Avangrid’s proposed acquisition of PNM Resources in 2021, saying the deal’s risks outweighed its promised benefits to state ratepayers.
There was no clear timeline for the resolution of a court review for the denial or other subsequent regulatory actions, Avangrid said. However, it said it would keep working “to bring clean, affordable, and renewable energy to New Mexico and the 23 states we operate in across the nation”.
“While our merger agreement with PNM has been terminated, we remain more than ever steadfast in our commitment to New Mexico in the development of wind and solar renewables,” it said.
It also highlighted its large portfolio of projects in New York and Maine, worth $7 billion, the first large-scale offshore wind project called Vineyard Wind off the U.S. North Atlantic coast, and a $5 billion plan to “repower assets” under the benefits of the Inflation Reduction Act.
An Iberdrola spokesperson said the company “is firmly committed to investing in the United States, it is our leading investment destination, with substantial organic investments planned in renewables and networks”, but would not comment on any acquisition plans.
Avangrid reaffirmed its 2023 forecast for earnings per share (EPS) and adjusted EPS, while PNM Resources said it would provide a financial update, including its preliminary results, in February.
“While the PNM Resources Board of Directors approved an extension, it was not accepted by Avangrid and Avangrid terminated the merger,” PNM Resources said in a separate statement.
Iberdrola shares were 0.5% off at 11.81 euros in afternoon trading in Madrid.
Iberdrola, a European leader in clean energy, has earmarked 47 billion euros ($51.48 billion) in investment between 2023 and 2025, with the United States as the largest single recipient.
The company has ramped up investments in electricity networks, and sources familiar with the matter said in November Iberdrola planned to make an offer for Britain’s Electricity North West (ENWL) that could value the network at a maximum of 3.5 billion pounds ($4.42 billion).
Source: Reuters.com