Avangrid, Iberdrola’s US subsidiary, announced on Tuesday that it is terminating its merger agreement with PNM Resources due to non-compliance with the conditions set for the closing of the transaction.
In this way, the group chaired by Ignacio Sánchez Galán renounces what was its big move to create an energy ‘giant’ in the United States with a market value after the merger of more than $20,000 million dollars (about €18,140 million).
The acquisition was to create one of the largest companies in the US sector, with ten regulated utilities in six states (New York, Connecticut, Maine, Massachusetts, New Mexico and Texas) and the third largest renewable energy operator in the country, with a total presence in 24 states.
Avangrid, which reaffirmed the targets it had announced to the market for 2023, stressed that it “intends to continue to focus on its strong growth opportunities, with more than $9 billion (about €8.17 billion) in organically secured incremental capital projects during the merger pipeline”.
In early January 2022, Iberdrola declared its intention to take over PNM Resources through its subsidiary Avangrid by extending the expiry of the merger contract signed by both companies to accelerate their growth in the US market.
At the time, the regulator of the State of New Mexico rejected Iberdrola’s purchase of PNM Resources through its subsidiary. The no to the deal was unanimous among the five members of the commission, who considered that the risks of the deal outweighed the promised benefits to state taxpayers. Behind it was a suggestion that the company was not “honest” because of the fallout from the Villarejo case, in which several Iberdrola executives are still under indictment.
Avangrid will not face any type of contractual penalty after deciding to terminate the agreement and merger plan with PNM Resources, as the conditions set out in the agreement for the closing of the transaction were not met within the time frame foreseen for this purpose, reports Europa Press.
The merger agreement between the two companies was conditioned, among other things, to the receipt of all required regulatory approvals, failing which either party could withdraw from the agreement before the deadline for completion after the last extension, which was scheduled for this past 31 December.
