Iberdrola to forge $20bn US clean energy titan

Iberdrola’s 2021 deal will see its Avangrid energy business operating in 24 US states. (Shutterstock)
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Updated 22 October 2020

Iberdrola to forge $20bn US clean energy titan

  • Green energy targets and increasing investor interest in protecting the environment have buoyed Iberdrola

MADRID: Spain’s Iberdrola announced a deal worth $8.3 billion including debt on Wednesday, adding PNM Resources to its Avangrid business to create the third-largest US renewable energy operator.

Absorbing PNM into Avangrid will create an operator present in 24 states, Iberdrola said, and bring together firms with a combined market value topping $20 billion.

Reuters reported on Tuesday that the deal was being discussed.

PNM’s board unanimously approved the $4.3 billion offer to its shareholders of $50.3 per share, the filing said. Iberdrola expects the deal to close in 2021 and start boosting financial results from the first year.

Green energy targets and increasing investor interest in protecting the environment have buoyed Iberdrola and other renewables-focused utilities.

The pandemic has also seen US utilities look harder at consolidation to cut costs and spur investment.

Active in New Mexico and Texas, PNM gives Avangrid a route to expand its regulated business beyond the US northeast.

PNM could also benefit from Avangrid’s renewables experience as it works to cut emissions. A plan has now been approved to close its coal-fired San Juan plant in 2022, Iberdrola said.

Iberdrola said the merged company would have assets worth $40 billion, generate core earnings of around $2.5 billion and net profit of $850 million.

This is Iberdrola’s eighth deal this year as part of a €10 billion ($11.85 billion) investment drive of which it has already spent more than €6.6 billion. It has shopped for assets in France, Australia and Japan.

CEO Ignacio Galan said his strategy consisted of: “Friendly transactions, focused on regulated businesses and renewable energy, in countries with good credit ratings and legal and regulatory stability, offering opportunities for future growth.”

Separately on Wednesday, Iberdrola reported nine-month net profit growth of 4.7 percent and said it still expected growth of mid to high-single digit in 2020.


US sanctions Chinese and Russian firms over Iran trade

Updated 29 November 2020

US sanctions Chinese and Russian firms over Iran trade

  • Four companies accused of ‘transferring sensitive technology and items’ to missile program

LONDON: The US has slapped economic sanctions on four Chinese and Russian companies that Washington claims helped to support Iran’s missile program.

The four were accused of “transferring sensitive technology and items to Iran’s missile program” and will be subject to restrictions on US government aid and their exports for two years, Secretary of State Mike Pompeo said in a statement.

The sanctions, imposed on Wednesday, were against two Chinese-based companies, Chengdu Best New Materials and Zibo Elim Trade, as well as Russia’s Nilco Group and joint stock company Elecon.

“These measures are part of our response to Iran’s malign activities,” said Pompeo. “These determinations underscore the continuing need for all countries to remain vigilant to efforts by Iran to advance its missile program. We will continue to work to impede Iran’s missile development efforts and use our sanctions authorities to spotlight the foreign suppliers, such as these entities in the PRC and Russia, that provide missile-related materials and technology to Iran.”

The Trump administration has ramped up sanctions on Tehran after withdrawing from the Iran nuclear deal in 2018.

Earlier this week, Pompeo met Kuwaiti Foreign Minister Sheikh Ahmad Nasser Al-Mohammad Al-Sabah, when the campaign of pressure on the Iranian regime was also discussed.

“I want to thank Kuwait for its support of the maximum pressure campaign. Together, we are denying Tehran money, resources, wealth, weapons with which they would be able to commit terror acts all across the region,” he said.

It is not yet clear how the incoming administration of Joe Biden will deal with Tehran and whether it wants to revive the nuclear deal which would be key reviving the country’s battered economy. The Iranian rial has lost about half of its value this year against the dollar, fueling inflation and deepening the damage to the economy.

Iran’s economy would grow as much as 4.4 percent next year if sanctions were lifted, the Institute of International Finance (IIF) said last week. 

The economy is expected to contract by about 6.1 percent in 2020 according to IIF estimates.