Iberdrola launches $2.5bn bid for full control of US subsidiary Avangrid

Global green power giant Iberdrola has launched a bid to take full control of its US subsidiary Avangrid by offering a 10% premium to acquire the 18.4% of equity it does not already own.

In a filing to the Spanish securities market commission (CNMV), Iberdrola stated that its offer amounted to $34.25 per share, representing an investment of $2.48bn for the company.

"The objective of this transaction is to increase exposure to the networks business in the United States at a key time for Iberdrola, which wants to grow in markets with high credit ratings and in regulated businesses such as networks," Iberdrola stated.

Headquartered in Connecticut, Avangrid currently has $44bn in assets and operations in 24 US states, with its main businesses areas described as networks and renewables.

Iberdrola is one of the biggest players in global wind and solar today but maintains a roughly even split in revenues between renewables and networks.

Avangrid reflects this split too. Through its renewable energy business, Avangrid owns and operates a portfolio of renewable energy generation facilities throughout the United States.

Through its networks business, Avangrid also owns and operates eight electric and natural gas companies, serving more than 3.3 million customers in New York and New England.

In 2023, the subsidiary posted adjusted gross operating profit of $2.4bn, and $2.3bn a year earlier.

Headed by CEO Pedro Azagra, Avangrid has also been a prominent player in developing offshore wind capacity in the US.

Avangrid moved faster than peers in cancelling power purchase agreements (PPAs) for both of these projects last year, after finding that surging inflation and financing costs made them uneconomical.

The two projects are now in contention for the next Connecticut-Massachusetts- Rhode Island auction.