Spanish renewable energy giant Iberdrola, a global leader in the sector, announced on Friday the acquisition of 88% of the capital of the British company “Electricity North West Limited” (ENW) for €2.5 billion.
Transaction Details and Valuation
“The transaction includes the purchase and sale of shares representing approximately 85.6% of ENW’s capital, as well as a capital increase in ENW through which Iberdrola will acquire an additional stake of approximately 2.4% of the capital of said company,” Iberdrola stated in a press release to the Spanish stock market regulator.
“The total value of the company, including debt, amounts to €5 billion,” Iberdrola specified in another press release.
Remaining Shares and Partnership
The remaining 12% of ENW, which distributes electricity to nearly five million customers in northwest England through a 60,000 km network, remains in the hands of a consortium of Japanese investors, with whom Iberdrola has signed a shareholder agreement.
Regulatory Approval Pending
The transaction is still subject to approval from the British government and its competition and markets authority.
Strategic Investment in Countries with Strong Ratings
Iberdrola is pursuing its strategy of investing “in countries with strong ratings, such as the UK’s AA credit rating,” explains the group, adding that “since the acquisition of Scottish Power, the UK has been one of Iberdrola’s investment destinations with nearly €36 billion invested.”
UK Becomes Iberdrola’s Leading Market
“With this transaction, the UK becomes the company’s leading country in terms of network asset base, with approximately €14 billion, followed by the United States with €13.3 billion,” Iberdrola further specifies.
Iberdrola’s Strong Financial Performance
The Spanish flagship company saw its profit soar by 64% year-on-year in the first half, thanks to significant asset sales and an increase in electricity production, particularly from hydroelectric sources.
Iberdrola generated €4.13 billion in net profit between January and June, compared to €2.52 billion in the first half of 2023, according to the results published at the end of July.
Future Investment Plans
The group announced at the end of March a planned investment of nearly €41 billion between 2024 and 2026. These investments will mainly focus on the United States (35%), the United Kingdom (24%), and the Iberian Peninsula (15%), according to the company.