Alphavalue/DIVACONS | The Spanish utility is exiting the Mexican market to finance its €55 billion investment plan through 2031, with a strategic focus on regulated network businesses in the United States and the United Kingdom. On Thursday after the close of trading, the group reached an agreement with Cox ABG for the sale of its 2.6 GW generation and supply portfolio in Mexico for $4.2 billion.
The divestment of most of its CCGT assets in Mexico had already been completed last year for $7 billion. This latest transaction is considered to be fairly valued and strategically sound, as it allows the company to mitigate the volatility of power generation and currency risks in the country. The EV assigned to Iberdrola Mexico, which includes net financial debt and minority interests, amounts to approximately $4.17 billion (about €3.64 billion), based on the balance sheet as of 31 December 2024.
The final purchase price is subject to customary adjustments. Upon signing, the buyer will pay $35 million (€30.6 million), which will be deducted from the final amount. We consider this strategic shift towards regulated networks in core markets to be very positive and therefore reaffirm our constructive outlook on Iberdrola.
Iberdrola: Add, Target Price €17.6/share.
