Iberdrola moves to take full control of its United States subsidiary, Avangrid. The Spanish utility has launched a bid to acquire the remaining 18.4% stake in the U.S. firm for 2.486 billion dollars (about 2.28 billion euros), aiming to strengthen its footprint, especially in the North American grid business.
Iberdrola offers 34.25 dollars per share, reflecting a premium of roughly 10% to the last 30 days’ average trading price. Currently, Iberdrola already holds about 81.6% of Avangrid, a company with 44 billion dollars in assets and operations across 24 states in the United States.
The core segments for Avangrid are its networks and its renewable energy portfolio. Through its networks business, Avangrid owns and operates eight electricity and natural gas companies that serve more than 3.3 million customers in New York and New England. Its renewable energy arm manages a broad portfolio of renewable generation projects across the United States, and the company currently employs around 8,000 people.
Abandonment of the PNM deal
The Avangrid move comes after Iberdrola abandoned a large acquisition intended to accelerate growth in the United States, a key market for the group. Avangrid and PNM Resources terminated their merger agreement in January, which had been announced in October 2020 and carried a value of about 8.3 billion dollars, with plans to create a major electrical player in the U.S.
After more than three years of negotiations, and after extending the integration contract twice, Iberdrola’s U.S. affiliate chose not to seek another extension. The deal, set to expire on December 31 but with a potential three-month extension if both sides agreed, was cancelled, marking one of the largest cross-border corporate moves for the group.
The merger faced opposition in late 2021 when New Mexico authorities cited service-quality concerns from Avangrid in other states and reputational questions tied to a high-profile governance matter. Since then, Avangrid and PNM Resources engaged in legal battles to overcome the veto and salvage the transaction. Given the uncertainty about overcoming the veto and timing, Iberdrola decided not to push forward with the operation.
United States as a strategic market
Iberdrola has positioned the United States as a crucial growth market and has confirmed that all expansion plans in the country remain intact after stepping back from the PNM deal. Avangrid is expected to continue prioritizing opportunities with a robust growth outlook and renewable energy initiatives under U.S. incentives and policy support implementation. The company outlined significant investment plans in renewables, leveraging federal green incentives to accelerate project development.
Looking ahead, Iberdrola plans to present its strategic roadmap during a forthcoming capital markets event, detailing updates to its long-term plan and projections for the United States. The United States remains a central destination for Iberdrola’s investment, representing a substantial share of its overall capital expenditure and growth ambitions for the coming years. The group is expected to reveal how it will navigate regulatory, market, and policy environments to sustain its expanding footprint in North America.
Overall, the strategy emphasizes expanding the core networks business and accelerating renewable generation capacity, driven by market demand, technological advances, and supportive policy frameworks. The company aims to translate these opportunities into reliable service, improved grid resilience, and meaningful carbon reductions for customers across the United States.