By Avangrid, the U.S. renewables subsidiary of Iberdrola, has decided to end its merger agreement with power company PNM Resources. The $4.3 billion deal, which was initially reached in October 2020, faced a setback when Avangrid rejected a bid to extend the deadline.
Iberdrola, the Spanish energy company, revealed on Tuesday that Avangrid terminated the agreement due to the failure to meet the closing conditions within the agreed timeframe.
In response, PNM Resources expressed disappointment with Avangrid’s decision to dissolve the agreement. The board of directors, hoping for an extension, had approved it, but Avangrid declined the offer.
The termination of the merger deal marks the conclusion of a complex and yearslong process. Regulatory opposition posed a significant challenge to both companies as they aimed to combine their resources and expertise in investing in infrastructure and new clean technologies to support the transition towards renewable energy.
Avangrid’s Acquisition Plans in Jeopardy as New Mexico Regulators Reject Deal
Albuquerque, N.M. – In October 2020, Avangrid announced its intention to acquire PNM Resources, a leading energy company based in Albuquerque, for a staggering $4.3 billion in cash. The deal, originally set to be finalized by the end of 2021, aimed to create a powerhouse in the industry, serving more than 4 million electric and natural-gas utility customers while boasting an impressive 7.4 gigawatts of renewable assets.
Unfortunately, the proposed transaction faced a major setback in 2021 when it was rejected by New Mexico regulators.
In light of this development, the deal’s deadline has been extended until December 31, 2023. The waiting game continues as the New Mexico Supreme Court reviews the appeal filed by Avangrid in January 2022, challenging the decision of the New Mexico Public Regulation Commission’s denial of the transaction.
Aware of the uncertainty surrounding the PNM Resources deal, executives at Iberdrola, Avangrid’s parent company, have been actively exploring alternative opportunities in the U.S market. Selling a minority stake in Avangrid is among the options being considered, according to Iberdrola’s Chief Financial Officer, Jose Sainz Armada.
Meanwhile, PNM Resources reaffirms its unwavering commitment to investing in critical infrastructure to meet the future energy needs of its valued customers.
Comments