Spanish renewable energy giant Iberdrola has signed an agreement to acquire 88% of Electricity North West (ENW) in the UK for an equity value of £2.1 billion (€2.5 billion). The deal include 100% of the company along with debt, which stands at €5 billion ($5.2 billion).

 

Announcing the strategic move, Iberdrola said it has signed a shareholders' agreement along with a consortium of investors from Japan, led by Kansai, which will retain 12% of ENW's capital. This collaboration is on a long-term basis. 

 

The acquisition is subject to the standard authorizations for this type of transaction.

 

With the move, Iberdrola reinforces its commitment to invest in electricity networks in A-rated countries. 

 

This acquisition is consistent with Iberdrola's strategy to invest in electricity networks and in countries with a strong credit rating, such as the United Kingdom (AA credit rating).

 

With this, the UK has become the company’s leading market by regulated asset base.

 

Since the merger with ScottishPower in 2007, the UK has been one of the leading investment destinations for the company, where it has invested around £30 billion (€36 billion) in that time. ScottishPower is the only 100% green integrated utility in the UK.

 

With the completion of the deal, the UK becomes Iberdrola’s leading market by regulated asset base, which is valued at approximately €14 billion, followed by the US at €13.3 billion.

 

Iberdrola’s Executive Chairman Ignacio Galán said: "This transaction reinforces our commitment to investing significantly in electricity networks, which are a critical component for supporting the electrification and decarbonization of the economy."

 

"The agreement is also consistent with our strategy to invest in countries that have ambitious investment plans and stable and predictable regulations. As a result of this acquisition, our regulated networks asset base in the UK is now valued at €14 billion. When combined with the US, these two markets now represent two-thirds of our total global regulated asset base," he stated.

 

Geographically, ENW is located between the two existing ScottishPower networks license areas, in central and southern Scotland and Merseyside and North Wales.

 

ENW distributes electricity to almost five million people in the North West of England, in locations such as Manchester, Lancaster and Barrow, and has approximately 60,000 km of electricity distribution networks.

 

The acquisition accelerates Iberdrola's commitment to grow its electricity networks business, with the company now becoming the second largest electricity network operator in the UK. 

 

Iberdrola will now distribute electricity to around 12 million people in the UK, across a network which will span more than 170,000km. In addition, the Spanish group will employ more than 8,500 people in the country.-TradeArabia News Service