Iberdrola Acquiring UIL Holdings For $3 Billion For Expansion Into US
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The biggest electricity company in Spain, Iberdrola SA, is acquiring UIL Holdings Corporation for roughly $3 billion in cash + stocks — in order to add to its American holdings and create a new US utility (with ~3.1 million potential customers), according to recent reports.
The terms of the acquisition will see UIL shareholders get $52.75 per share — with $10.50 of this number coming via cash and the rest via shares in the new company, according to Iberdrola. Altogether, that represents a figure roughly 25% higher than UIL’s most recent stock closing price.
After UIL is combined with Iberdrola’s other assets in the US, a publicly traded entity will be created — giving the company access to the shale-gas market. Which was, apparently, part of the reason for the acquisition.
The purchase “allows us to become part of the nice cake which is the shale gas development in the US, so that’s attractive,” stated Iberdrola Chief Financial Officer Jose Sainz, during a recent conference call. “I think we are going to cut a piece of that cake”.
Of particular interest to CleanTechnica readers, is that the new company will control the second-biggest operating wind energy portfolio in the country.
The company will also invest $6.9 billion over the next 5 years — including pursuing the “highly attractive” renewable energy market, according to a recent press statement. Iberdrola is, after all, (arguably) the biggest renewable energy producer in the world.
The boards of both companies have already approved the deal — which is expected to be closed by the end of 2015. Regulatory approvals are still pending.
“We will be a more diversified and stronger utility as a group with greater scale and financial resources to support continued investment in system reliability and infrastructure projects,” stated UIL Chief Executive Officer James P Torgerson, the future CEO of the new company.
Image Credit: Iberdrola
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