Iberdrola has agreed to sell businesses in Mexico for $4.2 billion. The transaction is in line with expectations to invest €55 billion in its electricity transmission and distribution network subsidiaries, mainly in the US and the UK.
- The transaction is in line with expectations to invest €55 billion in its electricity transmission and distribution network subsidiaries, mainly in the US and the UK
- The transaction, combined with the recently executed capital increase, secures the resources to meet these investments
- The deal includes 15 power plants with 2.6 GW of capacity, the commercial activity and the portfolio of projects under development, which the buyer intends to put into operation in the future
- The agreement, subject to the usual approvals, implies a multiple of US$1.6 million per MW of operating capacity
The operation responds to expectations of organic investment of €55 billion in transmission and distribution electricity networks in its subsidiaries in the US (Avangrid Networks), the UK (ScottishPower Energy Networks), Brazil (Neoenergia) and Spain (i-DE), which will almost double its regulated asset base to €90 billion in the coming years.
This strategy has already led Iberdrola's British subsidiary, ScottishPower, to acquire the Electricity North West distribution company, which serves the northwest of England, just a year ago for €5 billion.
Together with the recently executed capital increase, operating cash flow and current liquidity, the transaction secures the resources to meet the Group's investment plans in the coming years.
The deal, which assumes a valuation multiple of $1.6 million per operating MW, includes an installed capacity of 2.6 GW in operation -1,368 MW of combined cycle and cogeneration plants and 1,232 MW of wind and photovoltaic assets-, the commercial activity and the portfolio of generation projects, which the buyer intends to put into operation in the future in line with its expansion plans in the country and the frameworks created by the Government of Mexico to promote new generation. As these projects are completed, the buyer would make payments to Iberdrola in addition to the agreed $4.2 billion.
The transaction is subject to obtaining the necessary regulatory approvals.
Source: Iberdrola
